Almost two months after Bank of America laid off hundreds of branch employees
across the Northeast, the actual number of layoffs remains a secret. Under political
pressure in Massachusetts, the bank said it had cut 135 jobs in the Bay State.
But in Rhode Island and most of FleetBoston Financial’s old footprint, the answer
has been “no comment.”
The Citizens Financial Group, which on Aug. 31 completed its $10.5 billion acquisition of Charter One Financial, has yet to confirm or deny a Cleveland Plain Dealer report that 900 people would be laid off, including 400 in Cleveland.
Sovereign Bank, on the other hand, said even before its purchase of Seacoast Financial Services was completed that 350 jobs would be lost. And in May, Webster Financial Corp. said its acquisition of FirstFed America would eliminate 150 jobs.
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It’s a reality of today’s banking world: Banks merge and buy one another, and inevitably, jobs are lost, especially in administration and back-room operations. How banks handle that fact, however, varies dramatically among institutions.
Bank of America has been upfront about the global impact of its merger with Fleet: 12,500 jobs over time, though it promised that ultimately New England would not suffer a net job loss.
But Bank of America also said no “customer-facing” jobs would be cut, and then in August the Boston Globe reported that 1,500 branch employees would be laid off or reassigned in a single day. The bank acknowledged that some layoffs were occurring, but refused to say how many, saying only that the Globe had overstated the figure. Later reports said it was closer to 1,000, but no official number has been given.
Citizens has also been circumspect. Asked about the Plain Dealer report, Kathy O’Donnell, vice president and director of public relations, said the bank would only confirm that job losses would be “in the hundreds.” She also confirmed that 400 jobs had been cut in the Rochester, N.Y., area through the closing of an auto finance unit.
“Ninety percent (of the layoffs) don’t happen until July of next year, so between now and then, those people can re-deploy elsewhere,” O’Donnell added.
At Sovereign, Thomas B. Kennedy, senior vice president and CRA manager for New England, said the Philadelphia bank had chosen to put the job figures “right upfront” both out of a sense of fairness to the workers, and for the community.
“We said, ‘This is exactly what it’s going to be,’ and let everyone know,” Kennedy said. A large team of Sovereign executives met with state and local officials to discuss the impact on the region – New Bedford will be particularly hard-hit – and explain Sovereign’s plans.
“If there is news of a negative nature, it’s better to deal with it upfront,” Kennedy said. Sovereign also committed itself to providing about $3 million worth of grants over five years to match what Seacoast’s three banks, Compass, Nantucket Savings and Abington, were giving the community. And it pledged to invest $3.6 billion in the state and bring a new level of expertise and resources to the area.
“We feel confident that this will serve us well,” Kennedy said.
A careful handling of layoffs, of course, is only part of a bank’s challenge in entering a new market, especially when it takes over a well-known local institution. Sovereign, Citizens and Webster – and, despite the layoff muddle, Bank of America – have all made a point of keeping familiar faces where it counts the most: in front of customers.
Sovereign, Citizens and Webster all kept the “customer facing” personnel, so familiar tellers would greet customers, and the same officers would continue to process business customers’ loans. Gradually, operations have to be integrated, and changes will happen at all the banks, but all three said that, unlike Bank of America, they wouldn’t substantially restructure the branches.
Charter One is “a retail-oriented bank, just as we are, so in that sense, fundamentally, our businesses are pretty similar, which is why we chose them,” said William K. Wray, Citizens executive vice president and chief information officer.
Following its New England and mid-Atlantic models, Citizens has also set up a new Midwest region with headquarters in Cleveland and state presidents. And to welcome Charter One staff into the fold, hundreds of senior Citizens executives visited the branches on the first day of joint operations, and played a video from Chairman and CEO Lawrence Fish thanking them for their work.
“We spend a lot of time with our new colleagues, because they’re the ones on the front line,” Wray said. And to ease the transition from a logistical perspective, he added, Citizens is taking it slow with the conversion, so people don’t find their ATM cards suddenly don’t work, or they can’t log onto their online banking account.
“Our goal is that you don’t even notice the integration,” he said, “except one day maybe you walk in and the walls are green.”
