Data Dimensions has announced it intends to lay off more than 100 people at its two facilities in Janesville after a major government client did not renew a contract it held with the document and data management company.
According to a notice the company filed Friday through the Wisconsin Department of Workforce Development, Data Dimensions is laying off 111 people at its locations at 423 Midland Road and 400 Midland Court.
In the notice, which also is addressed to the Janesville City Council, Data Dimensions CEO Jon Boumstein wrote that “Data Dimensions just recently received notification from its government client that its current contract with the business organization will not be renewed at this time, resulting in a sudden and substantial unforeseen loss of business.”
The layoffs and notice come after a preliminary warning Data Dimensions issued to the state’s workforce agency March 27 that the company was experiencing “unforeseen disruptions” in business that it said stemmed from the COVID-19 pandemic.
Data Dimensions said at the time if those disruptions continued, it could have to lay off as many as 260 people.
In March, the company said the possibility of major layoffs loomed as it was “waiting on a contract renewal to extend certain operations past May 2020,” and that the renewal “in part was contingent on the effects of the COVID-19 crisis.”
It wasn’t immediately clear if the contract mentioned in the March notice was the same contract the company is now saying was not renewed. Data Dimensions did not name the client in either notice.
Data Dimensions processes data and documents for property and casualty insurance, financial services and government clients. Past clients have included the Veterans Administration, company officials have said.
According to the notice, the layoffs are “permanent” and will occur over the next few weeks. Many of the 111 people being laid off are rank-and-file employees within the document processing divisions.
Late last year, the company reported employing about 1,000 workers.
In the notice last week, Boumstein wrote that the government client that chose not to renew a contract planned to rebid “a portion” of the work under the former contract, but he wrote that Data Dimensions has “no guarantee as to when the RFP (request for proposals) will be issued,” what the contract might look like or whether the company would qualify for it.
Last year, St. Louis private equity firm Thompson Street Capital Partners acquired Data Dimensions as part of a partnership with a Chicago-based venture capital firm.
Data Dimensions had been owned since 2014 by Tampa, Florida, private equity firm HealthEdge Investment Partners.