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Providian Cuts Jobs to Stem Losses

November 15, 2001|Times Wire Services

Providian Financial Corp. fired 5.4% of its employees, shut down a customer service center and may sell $3 billion of its higher-risk credit card loans as it tries to stem rising losses.

The fifth-largest U.S. issuer of Visa and MasterCard credit cards also said Citigroup Inc.'s Salomon Smith Barney and Goldman Sachs Group Inc. have agreed to help the company raise at least $900 million.

Profit at San Francisco-based Providian fell 71% in the third quarter.

The firm said it has withdrawn previously issued guidance for the fourth quarter and full-year 2002 and suspended indefinitely its quarterly cash dividend.

Providian said it's working with Goldman Sachs and Salomon Smith Barney to sell $3 billion of the $9.4 billion in loans owed by customers with short or poor credit histories.

Providian will fire 700 employees as it closes its center in Henderson, Nev., outside Las Vegas.

Providian shares fell 15 cents to $3.68 on the New York Stock Exchange before the announcement.

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