Data Dimensions lays off about 120 workers
JANESVILLE--Data Dimensions is doing less work under a U.S. Department of Veterans Affairs subcontract, leading to the elimination of about 120 third-shift jobs, the company CEO said Friday.
"The contract in and of itself is very healthy. It's just a part of the process where part of the funding has dried up," Jon Boumstein said.
New York company Systems Made Simple has a contract with the VA, and Systems Made Simple subcontracts with Data Dimensions, Boumstein said.
"Our contract with Systems Made Simple funding was reduced," Boumstein said. "As a result, the amount of work being sent to us was also reduced, and therefore it doesn't support the staff numbers that we had."
Boumstein said funding for the contract was reduced 9.9 percent, but the contract still supports four Data Dimensions shifts--two in Janesville and two in Clinton, Iowa.
Former third-shift manager Marcia Johnson said many of those laid off Friday morning gathered at a Milton restaurant.
"I don't know how many times I've already cried," Johnson said.
"We were to leave immediately and not able to address any of our staff," she said.
Johnson said the workers were then walked out of the building.
Janesville police were dispatched to Data Dimensions, 400 Midland Court, at 4:53 a.m. to ensure calm after the lay-offs, Sgt. Brian Vaughn said.
The department sent at least one squad car and maybe two "because they were firing people, and they didn't know how they were going to react," Vaughn said.
Boumstein said Data Dimensions didn't know until a week ago how funding for the VA work would change.
"The employees really knew as soon as we knew," Boumstein said. "We've had volume fluctuations in the past ... but when the funding got to us, that basically sealed the deal that this was going to be a more permanent reduction."
A former third-shift worker who asked to remain anonymous said she was working her normal shift when supervisors told employees to head into a meeting and take their belongings.
At the meeting, they were told they were being permanently laid off and were given information about applying for unemployment, she said.
The entire third-shift was laid off, including people in scanning, benefits and uploading media departments, she said.
"People were shocked and sad," she said. "Across the spectrum of anything but happy."
Boumstein said the company waited to make an announcement until it knew for sure what was going to happen.
"Trust me, we're not happy people," he said. "We care about this community. We care about these people. We give a tremendous amount back to the community. It's just one of those things with service contracts."
The third shift was added in Janesville about 18 months ago, Boumstein said.
Wisconsin law requires employers of 50 or more workers to provide a 60-day written layoff notice, depending on certain factors. Boumstein said that notice was not required because the layoff affected less than 25 percent of the company's workforce.
Data Dimensions has nearly 700 employees in Janesville, Boumstein said.
“We're more than compliant with the law,” he said.
He said he understood concerns that former employees might have about the law, but “believe me, we went through all the diligence.”
Paul, a third-shift worker who would share only his first name, told The Gazette he planned to apply for unemployment compensation later Friday.
"There were some tears from some of the workers," Paul said. "It is unskilled work, but the paycheck was well over $15 an hour. There were people there who were supporting families with that money."
"We all have either our day-to-day responsibilities or hardships that we have to take care of, and it's gone," Johnson said. "Our livelihood is gone."
Data Dimensions provides health care-related business process outsourcing and automation services to clients in insurance, financial services and government.
It provides a range of outsourcing and professional services, including mailroom management and converting paper forms--insurance claims, medical claims, dental claims, loan applications, human resources forms and surveys, as well as other hard copy documents--into electronic documents.
Johnson said the VA cuts would not only hurt the former employees of Data Dimensions, but they also will affect veterans whose claims will be delayed.
Data Dimensions uploads information to make it easier and quicker for the VA to process claims, Johnson said. The service has cut claims time in half, she said.
Johnson said VA claims used to take more than 370 days, but Data Dimensions' assistance cut claims to about 176 days.
Since 2012, Data Dimensions had been working under contract to process and automate medical records for the VA. The contract has added significantly to the company's bottom line and its employee base, The Gazette reported earlier.
"I'm affected tremendously," Johnson said. "I'm looking at all the people who are affected."
Boumstein said Data Dimensions remains rock solid.
"We look at this as a temporary blip, and we're very hopeful," he said.