When the news broke two years ago that locally based credit card company Discover Financial Services had agreed to be acquired by out-of-town rival Capital One, this page declared that, company reassurances to the contrary, little good would come of this tie-up for our region.
We’re sorry to report that we may have underestimated the damage.
McLean, Virginia-based Capital One is laying off 1,139 workers based in Discover’s former headquarters in Riverwoods, the Tribune reported Thursday. That total is on top of about 600 let go late last year following the merger.
More than 1,700 workers who either worked at Discover’s sprawling Riverwoods campus or were remote employees tied to the operation have lost their jobs or soon will. That’s nearly half the Riverwoods workforce of roughly 4,000 that predated the deal.
That is tough news.
These sorts of good-paying, white-collar jobs are becoming harder to get — and to keep — thanks to AI and other belt-tightening effects, even without the fallout from cutthroat wheeling and dealing. Financial services are critical to the economy in the Chicago area and indeed in Illinois as a whole. A whopping 6.4% of Illinois workers rely on the sector for their livelihoods, and Chicago depends even more heavily on the industry, with 7.3% of its jobs in financial services, according to the state of Illinois’ most recent annual economic forecast, published last month.
The Discover deal hits especially hard in Lake County, once a hotbed of corporate activity but a county that has seen no growth in the number of financial services jobs compared with 25 years ago, lagging other Midwest regions, according to that same report. And that was even before these latest Capital One cuts.
With Discover’s $35 billion sale now an indisputable jobs disaster for Chicagoland, the only real question is whether Capital One intends to hold onto the 25.5-acre campus on Lake Cook Road that is home to 1.1 million square feet of offices housed in four separate buildings.
It wasn’t as if all 1,700-plus of the affected workers had been physically present at Riverwoods even before these cuts. More than 950 had worked remotely; many of those weren’t even living in Illinois, according to Capital One.
After these new layoffs, that 1.1 million square feet is going to feel awfully cavernous, we’re sure.
An instructive example lies just a short ways down the road from the former Discover headquarters. There sits an even larger tract that until recently housed a considerably bigger corporate campus — that of insurance giant Allstate. With Allstate years ago concluding that remote work made its massive real estate footprint superfluous, that 232-acre swath of land is in the process of being converted to warehouses. Better warehouses than vacant land, we suppose, but still.
We’ve said before, and we will reiterate here, that the earnings performance of our gradually dwindling number of Fortune 500 companies is critical to our economically stagnant region’s future.
Discover’s missteps made it vulnerable to takeover, and we are paying a steep price now.
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