Capital One to Lay Off 215 Employees Amid Discover Mortgage Business Shutdown

Capital One (COF) has announced plans to lay off 215 employees from its Discover Financial Services office, citing the gradual shutdown of Discover's mortgage business. The layoffs are set to be completed by mid-October, with remaining positions expected to be terminated by May 2026. The decision is part of Capital One's post-acquisition strategy following the completion of its acquisition of Discover Financial Services in May 2025.

Capital One Financial Corporation (NYSE: COF) has announced plans to lay off 215 employees from its Discover Financial Services office, citing the gradual shutdown of Discover's mortgage business. The layoffs are set to be completed by mid-October, with remaining positions expected to be terminated by May 2026. This decision is part of Capital One's post-acquisition strategy following the completion of its acquisition of Discover Financial Services in May 2025.

The layoffs are part of broader cost-cutting measures to streamline operations and integrate the Discover business into Capital One's existing infrastructure. The acquisition, which was completed in May 2025, saw Capital One's assets rise by 34% to $659 billion [3]. However, the integration has not been without its challenges, as the bank reported a $4.3 billion second-quarter loss in July, largely due to provision expenses tied to the acquisition [2].

The FDIC reported that aggregate net income for FDIC-insured banks and savings institutions fell by 1% in the second quarter, to $69.9 billion, with provision expenses rising by 33.7% to $7.6 billion [2]. The increase in provision expenses was primarily attributed to the Capital One-Discover acquisition. Despite the challenges, the FDIC noted that community bank profits rose by 12.5% in the second quarter, indicating a resilient sector overall.

Capital One's decision to wind down Discover's mortgage business is a strategic move to realign its portfolio with its core competencies. The bank has been expanding its presence in the D.C. area, with major banks eyeing more branches in Maryland and Virginia suburbs [1]. This expansion is part of a broader growth push, with the bank aiming to bring meaningful community benefits through its five-year Community Benefits Plan (CBP) [3].

The layoffs and shutdown of Discover's mortgage business are expected to have a significant impact on the local economy, particularly in the areas where Discover's operations were based. However, Capital One has pledged to provide comprehensive information to its customers regarding any relevant conversion activities well in advance of any future changes.

As the integration of Discover's business into Capital One's operations continues, investors and financial professionals will closely monitor the bank's ability to realize the anticipated benefits of the acquisition, such as increased competition in payment networks and a wider range of products for customers. The success of this integration will be crucial in determining the long-term financial health of Capital One and the broader financial sector.

References:
[1] https://www.bizjournals.com/washington/news/2025/08/27/capital-one-discover-layoff-home-loans.html
[2] https://finance.yahoo.com/news/fdic-capital-one-discover-deal-122541385.html
[3] https://www.businesswire.com/news/home/20250418414077/en/Capital-One-Receives-Final-Regulatory-Approvals-for-Acquisition-of-Discover