Bank Layoffs: More Than 10,000 Canned So Far With PM-Marriage of Convenience, Bjt Graphic
NEW YORK (AP) _ As a wave of consolidation begins to build in the nation’s banking industry, so does the human toll.
Banks have laid off more than 10,000 workers in the past year and more cuts are coming as the industry shrinks through failures and mergers, experts said Tuesday.
The combination of Chemical Banking Corp. and Manufacturers Hanover Corp., announced Monday, is the latest example of the costly shakeout under way in the banking business.
The two giants, both struggling to shore up shaky loan portfolios, said a merger would result in one healthier institution. But, they admitted, it would also result in the loss of about 6,200 jobs from a combined work force of 45,000. The cuts could be made by the end of the year when the merger is completed.
That news followed announcements of huge layoffs from Citicorp, 17,000; Chase Manhattan, 5,000; and Fleet-Norstar Corp., whose acquisition of the failed Bank of New England may trim 1,000 jobs.
There are conflicting estimates of total layoffs, primarily because many people find jobs with other banks across the country, according to interviews.
Already in the past year, about 10,000 bank jobs have been lost across the country, according to an estimate by Samuel Ehrenhalt, regional commissioner for U.S. Bureau of Labor Statistics in New York. Adding job cuts from savings and loans and credit unions raises the total another 6,000, according to the bureau’s Washington office.
And the Federal Deposit Insurance Corp. reported total bank employment fell to 1.502 million workers in the first quarter 1991 - a drop of 23,000 from the year earlier.
Bankers are cleaning out their desks in the wake of a similar purge on Wall Street that followed the 1987 stock market crash. Based on the Wall Street experience, Brendan Burnett, senior vice president of Sullivan & Co., estimates about 20 percent of the laid-off banking employees will leave the field altogether.
″A lot of folks have gone into something that’s totally different than what they were doing in the first 20 years of their careers,″ said Burnett, a job relocation specialist.
Ehrenhalt agreed that at least 20 percent of the dismissed bankers will leave the industry. Where they land is difficult to determine.
″The issue is whether they have the skills that will be sought in other industries,″ said Ehrenhalt.
The axe seems to be falling on a wide range of workers, from middle management to back-office workers who help process accounts and securities.
Most vulnerable are bank officers who generate loans on real estate, hard hit by the recession, and office support staffers whose work can be contracted to outside companies at a lower cost.
One growth area is officers specializing in working out troubled loans for corporate takeoves or real estate deals, said Raphael Soifer, banking analyst for Brown Brothers Harriman & Co.
Many banks, such as Citicorp and Chase Manhattan Bank, generally aren’t targeting tellers or loan officers in their branches. The banks said they don’t want to diminish the quality of service in the branches - a key factor in the competitive consumer banking business.
Ken Mills, spokesman for Chase Manhattan, said ″the consumer bank was hardly hit at all″ during the bank’s layoffs last fall. Most of the layoffs were in the bank’s corporate finance, operations, and European offices, Mills added.
About 1,600 of the 5,000 workers cut at Chase voluntarily left the bank under a special incentive program. The remaining workers were offered coaching in interviewing, preparation of resumes and other job placement services, Mills said.
Tara Little, a spokeswoman for American Bankers Association, an industry trade group, said ″layoffs are a last resort″ because of the investment in training many banks make in their employees.
A great number of laid-off bank workers, with skills in accounting and finance, can transfer their skills to other corporations, Little said.