Discover to cut 500 jobs next month

Discover to cut 500 jobs next month

Discover Financial Services is set to cut 500 jobs, about four per cent of its workforce, as it feels the impact of rising card delinquencies and lower consumer spending during the recession.

The jobs, across all positions and departments, will be axed next month, with most losses at the firm's headquarters in Riverwoods, Illinois.

Discover chief executive, David Nelms, says rising charge-offs, lower consumer spending, and the instability of the credit-card securitisation markets are affecting the entire industry.

"Discover must take these additional, difficult steps to manage through this unprecedented environment and put our business in the strongest possible position going forward," says Nelms.

Last month the company warned it was seeing a rise in delinquencies and charge-offs as the deteriorating economy and higher unemployment hits cardholders.

Despite reporting a jump in net income to $120 million (largely due to the settlement of antitrust litigation with MasterCard and Visa) the firm cut its dividend.

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