A collection agency in Minnesota that specializes in student loans has filed a notice with the state that it is laying off nearly 250 workers from three different locations, according to a published report.
National Recoveries Inc. notified the Minnesota Department of Employment and Economic Development last week of the layoffs, pointing to an executive order prohibiting the collection of student loans during the COVID-19 crisis as the reason why it was laying off the employees. The state agency has dispatched a team to work with the employees and help them find new jobs, according to the report.
Because it can no longer make outbound calls, send collection letters, and garnish assets or wages, the company said it could no longer continue to keep all of its employees on the payroll.
Unfortunately, many collection agencies across the country have been forced to lay off or furlough employees because of the coronavirus pandemic. Many clients have asked agencies to stop collecting on debts because so many people have lost their jobs or are suffering from strained finances, states have placed prohibitions on what collectors can and can not do during the crisis, and agencies have been suffered trying to cope with shelter-in-place orders across the country. The cumulative effect of all of these developments has forced many agencies to make the tough choice to cut back on the size of their workforces.
National Recoveries eliminated positions in its compliance and garnishment operations departments, as well as administrative managers and assistants, a shuttle bus driver, leadership developer, and various training, outreach, and analyst specialists.
In its letter informing the state of the layoffs, National Recoveries made it clear that the decision was a result of circumstances beyond its control.
