NETeller axes more than 200 workers in Calgary

Reno

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VIRGINIA GALT

Globe and Mail Update

More than 200 Calgary-based employees of payment processor NETeller Plc have lost their jobs as the result of an online gambling scandal that forced the British-based company to pull out of the United States market.

The firm's Calgary office handled most of the transactions for U.S. customers, the company said in a statement Friday.

NETeller voluntarily suspended its operations in the U.S. last month after U.S. authorities arrested two of its founders and charged them with handling billions of dollars in illegal gambling proceeds.

“The events of the past months have led to challenging times for the group and the board has taken these measures to ensure the group has a sustainable business going forward,” Ron Martin, group chief executive officer and president said in announcing a company reorganization and layoffs. In addition to the loss of 220 jobs in Calgary, 30 employees will lose their jobs when the company relocates to Cambridge from Gatwick.

NETeller said in a previous release that the company founders under investigation, Stephen Lawrence and John Lebebvre, were neither employees nor directors of NETeller when they were arrested and charged.

However, “as a result of the restrictions placed by third parties, court-ordered seizures and related legal concerns, the group is currently unable to make payments to U.S. customers.”

The NETeller group, which operates the largest independent online money transfer business in the world, will employ roughly 450 after the layoffs, down from a peak of 1,000 in 2006.

“To the group's knowledge, no criminal action or proceeding has been brought against the group, its current officers or directors by the U.S. State Attorney's office,” the company said in a statement last week.

“Nonetheless, there can be no assurance that the group will not be charged in a criminal action at some subsequent time. The group intends to work with the USAO to seek a negotiated resolution of any allegations relating to its U.S. operations.”

The firm's Calgary operation was most heavily affected because “transfer volumes and customer enquiries through the group's contact centres have decreased substantially since the group ceased processing transfers for U.S. residents,” the company said Friday.

“Staff reductions will total around 220 employees, across all levels, from the group's contact centre and security teams, as well as related support functions in marketing, processing and IT/product support.”
 

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