Capital One Financial eliminated hundreds of technology positions this week, the result of the credit card giant spending years investing in systems meant to improve its efficiency.
More than 1,100 workers were affected, according to a person familiar with the matter who asked not to be identified discussing a private matter. Those employees have been invited to apply for other roles in the bank, with hundreds of open positions across the company, Capital One said in an emailed statement Thursday.
"Decisions that affect our associates, especially those that involve role eliminations, are incredibly difficult," the McLean, Virginia-based firm said in the statement. "This announcement is not a reflection on these individuals or the work they have driven on behalf of our technology organization. Their contributions have been critical to maturing our software-delivery model and our overall tech transformation."
For years, Capital One has been investing in cloud technology that it's long said will allow it to both enhance products and improve its so-called efficiency ratio, a key measure of profitability that shows how much it costs to produce a dollar of revenue.
With this week's move, the company is eliminating positions focused on the so-called agile delivery of technology. Instead, engineers and product managers will be expected to use agile routines naturally.
"The agile role in our tech organization was critical to our earlier transformation phases but as our organization matured, the natural next step is to integrate agile delivery processes directly into our core engineering practices," Capital One said.
Capital One Chief Executive Richard Fairbank touted the firm's technology investments at an investor conference last month, saying they allow the company to move more quickly and tailor its response to a changing economic environment. Still, he warned, there are opportunities for the bank to remove legacy technology costs.
"We have invested very heavily in technology and we continue to do so," Fairbank said. "At the same time, along the way, the ability to generate efficiencies with respect to tech cost itself — what we call tech-on-tech efficiency benefits — is really significant."
Employees affected by the cuts who don't find another job within Capital One will be eligible for a severance package that includes at least 16 weeks of compensation, the company said.
