Capital One has notified Illinois officials of mass layoffs at the former Discover Financial Services campus in Riverwoods. According to WARN filings, about 597 positions will be eliminated in phases between October 2025 and May 2026.
This includes an initial round of 193 layoffs by mid-October and hundreds more by November, marking one of the largest bank-related cuts in the Chicago area this year.
Stakes
The Riverwoods site has long been a major credit-card hub. Discover Financial once employed over 5,000 people locally. Capital One’s WARN filings say the cuts cover 215 different job titles, from frontline staff to senior roles.
Notably, Discover’s chief marketing officer (26-year veteran Jennifer Murillo) is among those impacted, indicating this is a broad restructuring, not a limited departmental downsizing.
History
Discover Financial Services traces its roots to a 1985 launch by Sears executive Phil Purcell.
Over the next four decades, the Chicago-area firm grew into the nation’s fourth-largest credit-card network. The Riverwoods headquarters (2500 Lake Cook Road) became a center for Discover’s credit cards, personal loans, and online banking innovations.
It stood for years as a symbol of Illinois innovation in consumer lending and fintech.
Pressures
Banking consolidation has accelerated in 2024-2025. Regulators moved to simplify merger reviews, encouraging big deals even as consumer advocates warned of less competition.
At the same time, fintech startups and non-bank lenders have grabbed market share, squeezing traditional banks. Rising interest rates further compressed mortgage profits.
Capital One’s own retreat from mortgages in 2017 (when it cut 1,100 jobs) was explicitly blamed on a rate environment that made home loans unprofitable.
Acquisition Closes
On May 18, 2025, Capital One closed its $35.3 billion all-stock acquisition of Discover Financial Services. The deal gives Capital One roughly 60% of the merged company and Discover 40%, making it the largest U.S. credit card issuer by loan balances.
CEO Richard Fairbank said the merger “brings together two innovative, mission-driven companies” to create a payments network “that can compete with the largest payments networks”.
This combination positions the bank as a formidable challenger to Visa and Mastercard.
Illinois Impact
Illinois workers face the brunt of the post-merger cuts. WARN notices filed in Aug and Sept 2025 outline nearly 600 layoffs at the Riverwoods facility.
The filings detail 215 cuts announced in mid-August (linked to the home-loan exit) and roughly 382 more slated to begin in October.
Local economic development officials warn that losing this longtime corporate anchor could ripple through the north suburban business corridor and surrounding communities.
Human Angle
Capital One says it made these cuts only after an extensive review. In a company statement, the bank noted it “announced the difficult decision to exit Discover’s home loan business” and is “focused on supporting our customers and associates through this transition”.
The company has pledged enhanced severance and transition services for affected employees. The layoffs even reach senior staff: for example, longtime Discover executives have been notified, underscoring the wide reach of the integration.
Competitive Landscape
The merger creates a third major credit-card issuer. Capital One/Discover combined is now the third-largest U.S. card issuer, with over $250 billion in balances.
The merged company also gains control of the Discover payment network, so Capital One joins American Express as one of only two U.S. issuers operating both as a card issuer and network owner.
Capital One plans to move a portion of its card volume to the Discover network (while still using Visa and Mastercard for global acceptance), aiming to leverage this vertical integration to compete on interchange revenue and reach.
Macro Trends
Cost pressures follow consolidation. Capital One’s Discover integration is costing more than initially forecast – CEO Richard Fairbank said expenses will be “somewhat higher” than the original $2.8 billion estimate.
At the same time, banking markets remain challenging: mortgage lending, for example, has become structurally difficult, pushing banks to exit those low-margin areas and concentrate on higher-profit lines like credit cards. Scale is being pursued as costs get squeezed elsewhere.
History Repeats (Mortgages)
Capital One had already retrenched from mortgages in 2017. It shut down its home loan and equity businesses and cut about 1,100 jobs back then.
Capital One President Sanjiv Yajnik explained that the “challenging rate environment” made the mortgage business unprofitable.
This precedent highlights the bank’s willingness to jettison entire business lines (and associated jobs) when they fail to meet profitability thresholds, regardless of past investment.
Frustration Mounts
Some workers and advocates say Capital One has not provided adequate notice or clarity.
The company claims it gave at least 60 days’ notice and generous severance packages to affected employees, but labor groups and attorneys argue the layoffs were too abrupt.
WARN Act compliance is under legal scrutiny, and employees report feeling blindsided by tight timelines. Overall, the pace of cuts has generated deep frustration among Discover staff.
Leadership Statements
Capital One and Discover leaders have emphasized the strategic benefits. Founder/CEO Richard Fairbank called the tie-up a union of “two innovative, mission-driven companies that together are poised to deliver breakthrough products and experiences”.
Discover’s interim CEO Michael Shepherd echoed that the merger will enhance competition and innovation in payments.
Both executives acknowledged how difficult workforce decisions are, but insisted the deal is necessary for long-term customer value.
Strategy Going Forward
The merged company has outlined an integration strategy. Capital One says it will migrate part of its credit card portfolio onto the Discover payments network (while still using Visa/Mastercard internationally).
It also pledged an unprecedented $265 billion over five years to lending, philanthropy, and investment, including $35 billion for affordable housing.
Management has promised to continually review all Discover business lines for efficiency, signaling that it will shed any parts that don’t fit its core focus.
Skepticism
Opponents argue the deal could reduce competition and raise costs. Consumer advocates like Senator Elizabeth Warren have slammed it as “dangerous” to American families, saying the merger “threatens our financial stability, reduces competition, and would increase fees”.
Even with the huge community benefits plan, critics note that such mega-mergers concentrate power among the biggest players.
Economic forecasters warn that enlarged market share in subprime and other sectors may create systemic risks.
Forward (Integration)
Capital One expects to wrap up Discover integration by early 2026. Management cautions that success will depend on expanding merchant acceptance of Discover cards and winning consumer adoption of its offerings.
Many analysts predict additional headcount cuts as duplicate roles are eliminated and technology platforms are unified.
What happens next will test whether this scale-centric strategy can reshape the competitive landscape in credit cards.
Political Context
Federal regulators approved the merger despite concerns over industry concentration. In April 2025, for instance, the Fed fined Discover $100 million for past interchange overcharges just as it was signing off on the deal.
State attorneys general still retain authority to challenge the merger’s anticompetitive effects under state law, ensuring ongoing scrutiny.
The political backdrop is intense: regulators will be watching the combined company closely for any consumer harm.
International Angle
The Capital One–Discover tie-up mirrors a global pattern of banking consolidation. Across Europe and Asia, lenders are merging to gain scale and invest in technology, so the U.S. merger is being watched overseas.
If Capital One successfully leverages the Discover network internationally, it could spur similar moves by foreign banks or even lead regulators elsewhere to rethink large deals.
The outcome may influence how governments worldwide approach big bank and payment network mergers.
Legal Oversight
Legal work is ongoing during integration. Class-action attorneys have opened WARN Act investigations to determine if Capital One gave employees the required 60-day notice of layoffs.
Additionally, bank regulators continue enforcing merger laws under the Bank Merger Act as the integration proceeds.
Consumer protection agencies are also monitoring for any fee hikes or service changes on Discover-branded products, meaning the merged bank will face persistent legal and regulatory checks.
Cultural Shift
The Riverwoods closure marks a cultural shift in Illinois banking. Discover’s campus had been its home since 1985, and generations of employees had built careers there. Many long-time staff say losing this site feels like losing a community institution.
The change exemplifies how traditional, relationship-based banking is giving way to national, technology-driven institutions pursuing scale. In the suburbs of Chicago, that tangible local identity is fading.
Reflection
Capital One’s aggressive growth strategy reflects a banking industry in flux. By combining with Discover it becomes the largest U.S. credit-card issuer by balances, underscoring how scale and technology often trump older branch-focused models.
The deal embraces vertical integration – issuing cards on its own network – to challenge Visa/Mastercard dominance.
Observers say this could herald a new era: traditional banks yielding to digital-first competitors that span the financial services value chain.