Webster to cut 240 jobs companywide

WATERBURY, Conn. – Webster Financial Corp., parent of Webster Bank, today announced plans to eliminate 240 positions over the next year, more than half of them through attrition and the elimination of posts now vacant.
The “streamlining” is part of a company-wide revenue-enhancement and cost-reduction initiative called OneWebster. “Most of the plan will be executed during the next six to nine months, and the plan will be fully implemented in 24 months,” the company said today, in unveiling the initiative it has been drafting since January. “Webster foresees reducing its efficiency ratio to 60 percent in the fourth quarter of 2008 with sustainable improvements in 2009 and beyond.”
Webster projects it will incur severance and related one-time expenses of $3.1 million as it eliminates those positions, laying off an estimated 100 workers. “Affected employees will have the full support of Webster’s severance plan with outplacement services to help their transition, and Webster will consider them for future employment as the bank creates job opportunities,” the company said.
But the efficiency drive also is expected to yield savings of about $40 million and generate an additional $10 million in incremental revenue, compared with 2007.
“One of the major successes of this effort was our ability to realize efficiencies equal to 10 percent of our cost base while 97 percent of our employees remain minimally impacted,” Chairman and CEO James C. Smith said in a statement today.
Other changes will include investments in enhancing customer-service systems; adding staff in high-growth business lines; and using strategic procurement processes to leverage vendor relationships. They are based on a staff review of more than 3,000 employee recommendations, along with the recommendations of idea generation and evaluation consultancy Harvest Earnings Group LLC, the company said.
“Webster people took a careful look at all of our processes and activities through the eyes of our customers and were able to identify significant opportunities to reduce expenses and enhance revenue growth opportunities,” Smith said. “These steps will improve our operating leverage consistent with our ‘We Find a Way’ approach to customer experience, making Webster a better, more efficient bank.”
It was not yet clear which workers would be affected by the layoffs. Webster now employs about 3,300 workers, of whom about 2,700 are in Connecticut, the Hartford Courant reported today. The company recently laid off 165 workers, mostly in Connecticut, as it shut down its ailing wholesale lending group.
Webster Financial Corp. (NYSE: WBS) – a $17.2 billion company based in Waterbury, Conn. – is the holding company for Webster Bank N.A., a financial services company with 484 automatic teller machines and 181 banking offices, including 10 branches in Rhode Island. Additional information is available at websterbankonline.com.