More than 700 Austin employees of OneWest Bank are being laid off after the announcement that part of the bank’s business will be sold to an Atlanta-based financial services firm.
The layoffs at the Austin facility, which is in the Domain development in North Austin, will begin Aug. 31, according to a WARN letter the company sent to the Texas Workforce Commission. A WARN letter, which stands for the Worker Adjustment and Retraining Notification Act, is a federally mandated notice employers must provide to state governments in the event of major layoffs.
The majority of the 725 people being laid off are call center employees, said Elizabeth Chrisman, first vice president of employee relations and recruiting for OneWest Bank. She said about 150 employees would be retained at the Austin facility.
In the OneWest WARN letter, Augusto Giancola, first vice president of human resources, said the layoffs “are expected to be permanent. No bumping rights exist and none of the employees is represented by a union.”
Layoffs of this size have been unusual in recent years in the Austin metro area. Samsung Electronics laid off 550 employees in 2009, and in January, Advanced Micro Devices Inc. said it had eliminated about 400 positions at its Austin operations.
The Scooter Store, a New Braunfels-based seller of motorized wheelchairs and mobility scooters, laid off more than 900 workers and effectively shut down in March after it was raided by federal agents.
California-based OneWest is a federal savings bank with 75 retail branches and more than $25 billion in assets. It entered the Austin market in 2007 when it was called IndyMac Bancorp and opened a mortgage servicing center with several hundred workers on Parmer Lane in North Austin.
At the time, jobs included loan counselors and collectors, business analysts and customer service representatives and officials said salaries ranged from the mid-$30,000 range to between $50,000 and $60,000 for a large base of employees.
OneWest continued to expand in Austin, and in 2009 moved to a 173,000-square-foot facility in the Domain. At that point officials said the facility, near Burnet Road and Braker Lane, employed 870 people and had the capacity to handle more than 1,500 workers.
Dave Porter, senior vice president for economic development at the Greater Austin Chamber of Commerce, said “we’ve worked hard since 2005 to recruit IndyMac and then OneWest and to grow it here, and we’re trying to find out what their plans are. It’s concerning to us and we want to figure out what we can do to help them stay here.”
Ocwen, based in Atlanta, announced June 13 that it would purchase mortgage servicing rights and related advances from OneWest Bank for $2.53 billion. It was the latest in a string of acquisitions by Ocwen of companies that collect payments on subprime mortgages.
The deal is expected to close in stages during the second half of the year, officials said.
Porter said OneWest “has a pretty long-term lease, so maybe there is something else they might want to add here. If you look on their website, they have a significant presence in doing these jobs in India, so I don’t know what’s going to happen. Our goal is to see what we can do to keep as many jobs as we can.”
Austin’s call center industry has grown in recent years as companies have arrived to tap into the region’s trained workforce. About 23,000 people in Central Texas are employed in the call center industry, according to the chamber of commerce, and a number of California companies including LegalZoom have opened operations here.
The most significant project underway is Apple Inc., which is in the process of building a 3,600-job Americas Operations Center on Parmer Lane in Northwest Austin. Most of the jobs created in the $304 million expansion project are expected to be tied to operations service, support and finance for Apple’s business in North and South America.
“Because our labor costs are higher than San Antonio or other cities, we tend to attract the higher, more technically skilled jobs,” Porter said. “These jobs fill a void in our community and they’re one of the types of jobs we need most. They pay well above minimum wage, with people making probably $12 to $14 an hour or more.”
If Ocwen decides to sublease the space, finding replacement tenants shouldn’t be difficult, said Diana Holford, managing director of the Austin office of Jones Lang LaSalle, a global real estate services company.
“Employers like locating at the Domain because it helps them attract and retain talent,” she said, adding that the “large, efficient, open” layout of OneWest’s space “would be very attractive to a software company or other high-tech employer.”
Chrisman of Ocwen said the company hasn’t decided what to do with the extra space.
Layoffs are expected to continue through February, and employees will be offered severance and retention pay packages.
“Right now we are trying to reach out to some of our competitors in the area to let them know this has happened to see if they might be interested in our employees,” she said.