Verifications closing Mitchell and Aberdeen locations
Verifications Inc., a human-resources services company, announced Thursday it will close its Mitchell and Aberdeen locations before the end of 2012.
The closures will affect approximately 140 employees in South Dakota, with 79 of those in Mitchell. The jobs will be moved to other Verifications facilities in Arizona, India and the Philippines, a company news release said.
The company will continue to operate its location in Watertown.
According to Verifications Executive Vice President of Operations Bill Wilder, the company will shut down all operations in Mitchell on Nov. 16.
"The restructuring ensures that Verifications will continue to exceed the rising expectations of our clients," Wilder said in a news release. "This allows us to further enhance our customer service experience."
The India and Philippines locations will open in May and early next year, and create a combined 250 part-time and full-time jobs, the news release said.
According to Verifications employee Becky Jacobson, employees in Mitchell were asked to attend a mandatory meeting Thursday, at which they were informed of the closures.
"It was horrible," said another employee who asked to remain anonymous. "We walked into the room and there were Kleenex boxes on the table, so we knew."
Mitchell employees were shown a video of Verifications President and CEO Curt Marks announcing the closures, Jacobson said.
"There was a lot of crying," she said of the reactions. "It seems like we had been kept in the dark."
Despite the announcement, Jacobson, who has worked at Verifications for nearly five years, said she enjoyed her time there.
"More than anything, it was the people that made the place," she said. "The people I worked with, not necessarily the people I worked for."
Jacobson said employees were offered severance packages.
Marks said in the news release he was grateful for the work of all Verifications employees.
"We are saddened that this decision will negatively impact a number of our current team members," Marks said. "However, failing to take these steps will eventually result in negative consequences for all of Verifications' employees and customers."
Wilder said in an interview the company will do everything it can to help the affected employees find new jobs.
"We hope that other business leaders in Mitchell will be interested in some very high-performing talent," he said.
Verifications leases its Mitchell facility -- located at 1308 W. 15th Ave., just off the state Highway 37 bypass -- from the Mitchell Area Development Corp. and will continue to honor the obligations it made in that respect, Wilder said.
According to information reported in 2011 by The Daily Republic, the building housing Verifications was constructed by MADC using $1.5 million in loans, including $500,000 from the city of Mitchell and $700,000 from the state Revolving Economic Development and Initiative (REDI) Fund, with the remaining funds coming from other sources. The MADC also contributed $500,000 of its own funds.
Verifications paid MADC $124,797 annually for the first five years of its lease and agreed to pay $157,905 a year in the last five years of the lease.
According to Bryan Hisel, executive director of MADC and the Mitchell Area Chamber of Commerce, the lease agreement between Verifications and MADC extends to March 2018. The building was appraised at $1.6 million in October.
"It took us by surprise, which I don't appreciate," Hisel said of Verifications' announcement.
Hisel said he was not told about the closures before Thursday's announcement and the ensuing news reports.
Discussion between the company and MADC will need to take place to work out what will be done regarding the lease agreement, said Hisel, who declined to discuss details of any legal ramifications that may result.
"We're going to do everything we can to make sure the folks that work there have new opportunities," Hisel said. "We'll treat it as an opportunity to get a better company."
When Verifications opened in Mitchell in 2006, then-Gov. Mike Rounds and other dignitaries attended an opening ceremony.
"It's the type of employment that we've been looking for for a long time," Mitchell Mayor Lou Sebert said that day.