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American Express to close Greensboro service center

Thursday, January 20, 2011
(Updated 1:48 pm)

— No matter your perspective — economic, civic, philanthropic — American Express’ decision Wednesday to close its call center and move 1,500 jobs from Greensboro amounted to a devastating loss.

The company has been a major employer, sponsor and benefactor for more than 25 years, so the sweep of its decision left many in the Triad stunned.

“What a slap. What a tremendous blow — that staggers us,” said G. Donald Jud, professor emeritus at UNCG and a longtime analyst of the local economy.

The announcement that American Express would close its large service center near Piedmont Triad International Airport amounts to the single biggest regional job loss since Sears laid off more than 1,000 workers in 1993.

The call center, which opened in the mid-1980s, had been ranked as the 25th largest employer in the Triad. Most of the workers live in Greensboro or Winston-Salem, the company said.

But more than an employer, American Express is a major community benefactor, donating thousands of dollars and people-hours to causes across the Triad. The company acknowledged that it will scale back that commitment in two years.

“We just hate it,” said Jim Melvin, president of the Joseph M. Bryan Foundation . “American Express has been a great corporate citizen. … We’re just going to have to pick ourselves up from the canvas and keep going.”

If there was any silver lining Wednesday, it was that an estimated 400 of the Greensboro employees would be offered the chance to work from their homes. The rest of the workers will be offered jobs at call centers in Fort Lauderdale, Fla., Phoenix and Salt Lake City.

“Our hope is to retain all,” Jim Bush, the company’s executive vice president of world service, said at a news conference Wednesday. “The practical matter is, it probably won’t happen.”

Perceiving the severity of the community distress, Gov. Bev Perdue will visit Greensboro today to address how to start moving forward.

The company blames the closure on customers’ increased use of its corporate websites and the high cost of leasing the increasingly vacant call center.

Company officials declined to give a salary range for jobs in Greensboro, but American Express customer service positions in other cities range from about $14.50 to $16.50 an hour, with some positions paying bonuses, according to online job advertisements.

Jud said the losses would ripple through the Triad economy, affecting retail and real estate sales and the general consumer economy. “This is a very sad situation of the recession we’ve been going through,” Jud said.

American Express will not change its plans to build two data centers worth about $1 billion in eastern Guilford County, but the data centers will employ only about 100 people with highly technical training.

Local and state officials reacted to the closure of the call center with dismay.

“While I was encouraged to hear company officials say that this decision had nothing to do with North Carolina’s business climate, that doesn’t ease the concerns of employees who are facing uncertain futures,” Perdue said in a news release.

“These people, most of them will be offered jobs, but unfortunately in other locations,” N.C. Commerce Secretary Keith Crisco said.

“We’ll be (in Greensboro today) with a response team, working with the community college, working with local people. … We have a little experience in this, unfortunately,” Crisco said.

He likened the size and impact of the layoffs to Pillowtex, a textile manufacturer that laid off nearly 5,000 workers in 2003.

Mayor Bill Knight said he can appreciate the corporate decision that was made.

“American Express has been and will continue to be a good corporate citizen. They aren’t completely leaving,” Knight said, referring to the new data centers.

Robert Garinger, senior vice president and American Express’ general manager of the Greensboro center, said if more than 400 try the work-at-home option, the number of local jobs lost could be less. “We will take as many people who can do the home-based servicing work as we can.”

Those who choose not to move will get severance packages that include a bonus of 16 weeks pay plus up to $5,000 a year for education for up to two years.

Pat Danahy, president and CEO of the Greensboro Partnership , the city’s leading economic development group, said the news is difficult for everyone in the city, but he complimented the company on the generosity of its severance package.

American Express has encouraged its customers to use its websites for service and billing, and customers have responded.

About 50 percent of customers use the Internet for American Express service and 75 percent use it to pay their bills.

“We have seen a big reduction in business volumes due to changing consumer behavior,” Bush said.

Although the Greensboro center once employed more than 3,000 people in the 1990s , that figure dwindled through the years as the company cut jobs through retirements and resignations.

Now, Bush said, a third of the call center’s desks are vacant.

The building — a leased structure with 403,000 square feet of space — is too expensive for the company to maintain, Bush said.

American Express sold the $31.5 million building in 2004 to Inland Real Estate Group of Oak Brook, Ill . The building brought in $431,000 in local property taxes in 2010. Greensboro earned $85,000 a year for water service there.

With space available at its call centers in Fort Lauderdale, Phoenix and Salt Lake City , the logical choice was to move those jobs, Bush said. Greensboro performs a narrower range of services than the larger centers, Bush said.

American Express will not begin the changes for 90 days and the shutdown will not be finished until the end of 2011, the company said.

Overall, American Express expects to report a sharply higher fourth-quarter profit, although it will be reduced by charges from closing the Greensboro center. The company plans a worldwide consolidation that will eliminate 550 jobs, or nearly 1 percent of the credit card company’s work force.

Staff Writers Mark Binker, Amanda Lehmert and Taft Wireback, researcher Diane Lamb and The Associated Press contributed to this report.

Contact Richard M. Barron at 373-7371 or richard.barron@news-record.com

Accompanying Photos

H. Scott Hoffmann (News & Record)

Photo Caption: Robert Garinger and Jim Bush discuss the decision during a news conference on Wednesday.

Additional Photos

Contact us

Do you work at American Express? We’d like to hear how today’s news will impact you. Give Amanda Lehmert a call, 373-7075, or email, amanda.lehmert@news-record.com.

Comments

This article has been closed to new comments. Comments are generally closed after 14 days. However, comments may be closed earlier at the discretion of the News & Record.

Inappropriate content? Please report abuse.

janikiaW

January 19, 2011 - 9:21 am EST

NC is going down very rapidly

holland4

January 19, 2011 - 10:10 am EST

You're not prone to overstatement, are you, JanikiaW? No, not at all.

janikiaW

January 19, 2011 - 11:45 am EST

my cousin losing her job after 10yrs of service to Amex is not an overstatement. Do you have a job for her? btw she has a degree.

holland4

January 19, 2011 - 11:54 am EST

You didn't mention anything about a cousin, JanikiaW. Instead, you made a broad and generalized comment. While I'm sorry for your cousin, yes, it was an overstatement.

If my great-grandmother died this morning, I can't say, "Oh, no! Everyone is killing over in North Carolina! Everyone!"

janikiaW

January 19, 2011 - 4:27 pm EST

Yes I was being dramatic, but who isnt these days....

retiree

January 19, 2011 - 12:23 pm EST

Is she really losing her job, or are they asking her to take a transfer? I'd go to FL where there are no state income taxes.

Rolling

January 19, 2011 - 6:51 pm EST

Yeah, and you can enjoy sky high property taxes and an economy in ruin, along with the extreme heat and humidity.

ryanshell

January 19, 2011 - 8:57 pm EST

Actually, no it's not. North Carolina is well positioned and often eyed as a very competitive state by other states.

tledford

January 20, 2011 - 6:30 am EST

It's the Triad, not NC, which is sad but fortunate, in a way. She will probably have to move to the Triangle or Charlotte, where there are jobs and growth, as opposed to the withering-away Triad.

Lived here most of my life and it is sad to see the Triad's failure to not only cope with change, but even react to it with anything other than befuddlement.

Panacea

January 19, 2011 - 9:49 am EST

Not really. It is a shame to lose those jobs as far as the local economy goes, but if I were a NC employee and they offered me a job in Phoenix I'd take it in a heart beat. Phoenix is a lovely city, and housing costs very favorable right now.

We're getting a lot of tech jobs coming our way. Remember, American Express is starting a data center here soon. Tech jobs are better because they are skilled labor. Working in a call center is not skilled labor.

Illiterati

January 19, 2011 - 9:57 am EST

Tech jobs pay better, but data centers require many fewer employees. That said, if I worked at Amex right now, I would absolutely accept an offer to transfer to another Amex office or, even better, to work remotely from home.

terrier2003

January 20, 2011 - 9:32 am EST

American express data center will employ 100 people- that's a huge difference from 1500

Leonard

January 19, 2011 - 10:05 am EST

This is a terrible blow to the local economy. 2,000 people's lives disrupted and torn apart. Even though AMEX says people can be relocated, you have got to wonder how many of those 2,000 will actually get an offer to move. I feel for those employees. How many could actually take a chance to move that far away with spouses having their own jobs here and family close by. Who's to say how long someone would have a job in Phoenix or Florida before AMEX pulled the plug on those facilities too. This is horrible news.

Panacea

January 19, 2011 - 1:55 pm EST

A better question is, of how many who are offered a job, how many accept.

If I had a job offer, I would take it. Yes, moving is expensive in time and money. But it is better than being unemployed.

I've moved several times to take advantage of out of state job offers. And I've never had to take unemployment.

terrier2003

January 20, 2011 - 9:33 am EST

So I now make the connection as to why you defend government employees so much. It makes sense. When somebody calls your baby ugly, you always defend him or her.

dusenberry

January 19, 2011 - 10:14 am EST

Just wait till we get the tax bill on this one. Guess who will pay for the loss in revenue.

infolit

January 19, 2011 - 10:21 am EST

I really love how republican congressman held the white house hostage over unemployment benefits just before the new year. Can you imagine what these people would be going through if the president hadn't fought for those benefits? These people and millions of others that are out of work because their employers were greedy...

holland4

January 19, 2011 - 10:28 am EST

Good job. Way to politize the issue.

GSORev

January 19, 2011 - 10:29 am EST

My husband works at this facility...we are still learning how our lives will change.

PLEASE do not make this about which side of the aisle you support right now...it's about lives and how they will be effected.

infolit

January 19, 2011 - 10:31 am EST

As much as I feel for your family, you need to realize that the people you vote for have a tremendous impact on your personal well being. REMEMBER, Republicans voted AGAINST extending unemployment benefits to all Americans. I'm sorry if you choose to ignore the facts.

GSORev

January 19, 2011 - 10:40 am EST

I refuse to get into this with you...after an announcement like this is made, the LAST thing that is popping into my head is who voted for what...I'm more worried about how this IMMEDIATELY effects our future (not thinking about who did and did not vote for certain bills)...

Rolling

January 19, 2011 - 6:53 pm EST

You need to. Now you are one of "them".

Lord Trigo

January 20, 2011 - 10:11 am EST

Both the Republicans and Democrats have supported trade policies that hurt the American middle class, because they both work for the same corporations lol

countryboy

January 19, 2011 - 10:44 am EST

infolit is correct...better yet, let's blame it on the Bushes. No wait. How about Reagan. Oops...forgot about Nixon and Eisenhower. Let's go back and check how Lincoln voted on the matter. The insanity is mindboggling on this site. The recent political wrangling over benefits has no bearing on this issue. None. It was an attempt to bring attention to the free spending policies of Washington. Everyone (except infolit) knew it would fail...but it worked (to some extent) as a political manuever. The media has been reporting more on debt and deficit policy recently. I truly hope and pray that the affected AMEX employees will find work in this area without having to relocate. Best wishes.

LAtoNC

January 19, 2011 - 12:48 pm EST

What we are feeling now with the job losses is the effects of the Bush administration. Who voted to have jobs sent overseas?

holland4

January 19, 2011 - 1:06 pm EST

Really now. Just stop. Is nothing safe from the political bile you folks spew? Must you turn everything into a political debate? This isn't about Bush, Obama, or any politician for that matter. It's about a changing dynamic in the credit cards services sector and a company cutting costs in reaction to those changes. It's a tough break, but don't make it worse than it is with your hot air.

iamwatchingyou

January 19, 2011 - 2:05 pm EST

You are so far out of touch with reality. American Express doesn't give good happy damm about its employees. Amex would move their operation to Iraq if they could get you a kavlar vest and pay you next to nothing to do the job. Why do you think they shifted positions to India (State of Gurgon and the city of Mumbia (Bombay). Now, why did they move these positions, It was because the United States Congress created tax laws loop holes to send jobs overseas and the United States taxpayer would cover the cost. In addition, the building in which Amex is located here in Greensboro the value of he building in which they are located has been depreciated to zero for tax purposes.

Port City Guy

January 19, 2011 - 11:26 pm EST

Man that's weird to have a AmEx moves offices outside from America! "American" Express. Will be funny to see how quickly these 'sell out' companies last when US citizens can't afford their products anymore.

retiree

January 19, 2011 - 12:26 pm EST

You may not recall, but the Republicans didn't vote against the unemployment benefits as a policy matter, it was the Democrats who wanted to borrow the money to pay for them. Republicans wanted the President to find the money in the current budget (stimulus) which they could have done, but chose not to.

iamwatchingyou

January 19, 2011 - 2:08 pm EST

Now where is the money to come for the tax break for the top 2%. The dollar value will be approximately $46,000.00 per person. Where did the republicans find it? Your pocket book. Your Social Security benefits should be cut.

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