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Take Charge America Lays Off Substantial Staff

Yesterday I received a message from a tipster (send in your tips here) that said:

Due to the lawsuit and actions taken by the suit against TCA they on 3-13 completed mass layoff of over 50% over their workforce, down sizing mainly the new accounts departments. Many feel this may only be the first cut.

And today I learned an Arizona publication is reporting:

Take Charge America is laying off 83 people, roughly one-quarter of its staff, in response to a gradually improving economy that has slowed business for the non-profit credit-counseling firm.

The organization, headquartered in north Phoenix, also is embroiled in a dispute with the Internal Revenue Service over its non-profit status. That battle of more than seven years, now in federal Tax Court, apparently has slowed the flow of referrals of debt-laden individuals made by banks and other entities, said Mike Sullivan, Take Charge’s director of education. If the entity loses its non-profit status, that will require major shifts in its business model, he said. – Source

For more information on the suit discussed see Details on Take Charge America Suit Against Internal Revenue Service.

Update 3-14-2012 5:15 PM

Michael Sullivan from Take Charge just sent me the following statement:

“Take Charge America did eliminate 85 position, or about 25% of our total staff this week due to business conditions. We have observed a slowing over the last few months and hoped that it was a business cycle and would turn around as it normally does.

Unfortunately, it has not turned around and our litigation with the IRS over our audit, currently in its eighth year, has resulted in some of partners limiting or stopping referrals that represented a significant part of our business.

Although we are hopeful that a court decision will soon reaffirm our tax exempt status and put us back on a growth path we could not fail to address the fact that we were overstaffed. We were very sad to lose so many wonderful employees who had done so much good for so many consumers. Our cuts were across the board and included new and open accounts, training, quality assurance and other support groups.

We continue to be committed to serving all our current clients and any new clients who might want our help and we are still well staffed with over 200 employees ready to assist clients.”

Thanks to Michael for the statement.

Take Charge America Lays Off Substantial Staff
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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Anon

    Take Charge America just let go of 83 people another 90 is promised. The issue is that all key positions of the company are family based or extended family based and all but 3 of those positions are held by uneducated, unqualified people who have no business earning the salary they have been drawing on. I feel sorry as I watched people including ENTIRE families that were let go on Tuesday as the higher non-functioning original family members were reported on Facebook (by a non-laid off employee) to be laughing in a meeting of their own. There has never been any long term planning more over short term over spending on little return projects to make the company look good in the eyes of the IRS and creditors. The original CEO withdrew millions out of the company by creating smaller companies (Walking Eagle and David Haines Real Estate) and doing business with himself. I feel sorry for the existing customers as their credit card companies start to realize that TCA is no longer a non-profit, that the credit card companies fair share (fee to TCA) is no longer tax deductible and start dropping the customers from their credit counseling programs (raising the customer’s interest rates).You have to ask yourself, why would this company who is in the middle hiring freeze and downsizing due to lack of business for 2 years keep its highly paid non-productive marketing dept, over staffed HR Dept, over staffed training dept and accounting dept. If you are losing 100s of clients a week more than you are getting would you not lay off a great deal of support services that are solely there to input clients data and set up the accounts. Why would a company spend $400,000 in the last 5 months to create a system that automatically quality controls every word in a conversation, but then when layoffs are performed… take less than 10% of your QA dept? Why have Managers who oversee 1 supervisor and 3-4 other people? Why have 2 VIP’s of customer service? (family members). There is no doubt that some of the people who were let go on Tuesday needed to be let go, the customer base is rapidly diminishing, it is just in bad taste that the 20+ family members who are most likely responsible for 45+% of the salary dollars are all still employed.

    • Daivd S Haines

       I have been friends with Mike Hall since high school.  The character assassination of my good friend
      is unwarranted. Furthermore, I legally earned the several hundred thousand
      dollar commissions I made on the land I sold to TCA. Yes, I was a board member,
      but this was fully disclosed.Sincerely,David S Haines
      Sincerely,
      David S Haines

      • Bob1

        They had schools when Mike Hall was young?

  • Guest

    aybe this company would have had a better chance of survival and even growth if they had expanded their debt relief services to include debt settlement, I believe that we will see more of this involving CCA’s whose heads are in the sand regarding the options available for the consumers they serve.

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