First Data Merchant Services is laying off 10% of its employees, about 500 people, the company announced Thursday.

The unit of First Data Corp. is the country's leading merchant processor for credit and debit cards, and has been undergoing organizational turbulence for several months. With performance lagging, the company shuffled its management in October and is portraying the new layoffs as the culmination of those changes.

"This reduction is designed to improve the efficiency of our merchant processing operations while keeping our focus on customer service," said Charles T. Fote, the First Data executive vice president who oversees the merchant processing unit.

Work force reductions will take place at all levels of the company and in all 10 First Data Merchant Services facilities, which employ 5,200 people. One facility, in Sunnyvale, Calif., will be closed.

First Data will continue its efforts to "lower transaction costs and improve overall profitability," Mr. Fote said. "Our emphasis has been on identifying ways to streamline and combine work processes and eliminate any resulting duplication."

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