Arrow Financial Closing Call Center, Cutting 200 Jobs

Arrow Financial, a consumer debt purchaser and collector and a subsidiary of Sallie Mae, is reportedly closing its call center in Gaithersburg, MD and laying off 200 agents.

TheWashington Business Journal wrote Friday that the ARM heavyweight had filed with the Maryland Department of Labor, Licensing and Regulation to move forward with the layoffs. Bill Bodie, a manager with the state labor department’s dislocated worker unit, told The Journal that Sallie Mae is working with employees on outplacement and job relocation assistance.

Arrow Financial was founded in 1961 and since has grown to more than 1,000 employees in at least four locations in the U.S. Sallie Mae acquired a controlling stake in Arrow in 2004.

The Journal speculated that the nature of the differences in the business models of contingency collection agencies and debt purchasing with collection units may have led to the layoffs.

“Debt buyers have a revenue model that’s different from the stereotypical collection agency,” Paul Legrady, Director of Research at industry advisor Kaulkin Ginsberg Company, the parent company of CollectionIndustry.com, told The Journal. “They have changed their strategy and instead of receiving placements from collectors, they’re buying the debts outright and then determining what to do with them. Many are subcontracting out the collection aspect to other companies, and that makes call center-type operations unnecessary.”