The pink slips flying in north suburban Riverwoods due to Capital One’s buyout of Discover Financial Services are a bracing reminder of the stake our regional economy has in a mergers-and-acquisitions battlefield that’s heating up.
Capital One, the credit card and banking company based in McLean, Virginia, filed notice with Illinois that it’s laying off nearly 400 people, including 200 at Discover’s former corporate headquarters in Riverwoods. That follows news in August of the elimination of 215 jobs in Riverwoods from Capital One’s decision to pull the plug on Discover’s home equity lending unit.
Between the two moves, about 8% of Discover’s Riverwoods workforce is going to be looking for work. We’re confident these won’t be Capital One’s last such head-count reductions as it strives to make this $50 billion-plus deal pay off in meaningful part through corporate efficiencies.
That’s how the story goes when a major local corporation sells to a larger rival. When the news first hits, both seller and buyer typically offer reassurances that the merged outfit will keep a “meaningful presence” in the losing city and maintain substantial philanthropic activity there as well. But over time, more often than not, that presence becomes a lot less “meaningful” and those donations ebb.
We hear from Capital One that it’s fulfilled its pledge to boost head count to 1,000 from 600 at Discover’s call center in Chatham on Chicago’s South Side, which is good news. Still, it’s fair to say that facility, opened with great fanfare four years ago as one of the most noteworthy actions in many years by a local Fortune 500 company to create jobs in a part of the city starving for investment, wouldn’t have happened if Discover already had been acquired at that point.
Such also is the price of losing corporate headquarters. Initiatives that go beyond writing checks to various local nonprofits aren’t generally even contemplated by companies whose CEOs live in other cities.
The layoffs come at a particularly difficult time, too, for white-collar workers. Hiring is anemic, as Federal Reserve Chairman Jerome Powell reiterated on Tuesday. If you lose your job right now, for whatever reason, finding a new one is likely to take months.
In Illinois, total jobs fell by 13,300 in August, the largest monthly decline in more than two years, according to Gov. JB Pritzker’s office. In five out of eight months in 2025, jobs in Illinois have dropped.
These are uncertain economic times, to say the least. Our region has more than the usual rooting interest in Corporate Chicago’s win-loss record in the merger sweepstakes now being unleashed by a laissez faire Trump administration.
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