Reposted from the CheckFree thread:
Thousands are expected to lose jobs in region
By Diane E. Lewis, Globe Staff, 03/15/99
The joining of Fleet Financial Group and BankBoston Corp. will result in the layoffs of 4,000 to 5,000 employees across the region, sources close to the deal said yesterday, one of the biggest hits to the local banking industry in years.
In all, 60,000 people now work for the two banks worldwide, many of them employed at BankBoston's 427 branches or at one of the 1,150 branches Fleet operates across the Northeast. Senior company executives said yesterday the banks would close about 24 branches, and many other locations would be sold off to satisfy antitrust regulators concerned about preserving competition in the industry.
Both banks have been shedding jobs for years, as a wave of consolidations and mergers has swept through the industry nationally. Fleet laid off nearly 6,000 people between 1993 and 1996 after it absorbed the failed Bank of New England and other banks, and instituted a cost-saving program. The 1996 merger of BayBanks Inc. and BankBoston resulted in the elimination of 2,000 jobs.
Industry experts said the banks can avoid panic among their staffs by providing specifics on job-cutting early on.
''They should definitely try to dispel excessive fears within the two organizations, but people must also know that cuts are coming,'' said Laurent Jacque, a professor of international finance and banking at the Fletcher School of Law and Diplomacy at Tufts University.
''The second smart thing to do would be to make the announcement, and make sure that the people they really want to keep will know quickly that they are part of the merger no matter what happens,'' Jacque said. ''Some banks do that very well. They are smart, and they are swift in their approach to senior managers and staff.''
Fleet has been criticized in the past for its heavy-handed approach to layoffs. By contrast, the job cuts that BankBoston instituted after the BayBanks merger were praised for their sensitivity. Workers received extra pay based on years of service and salary levels, and retirement and financial counseling were made available. Both banks also agreed to help employees establish businesses on their own. In addition, the two banks provided six-month stipends to allow some former employees to participate in community service.
Among the employees mostly likely to be affected by layoffs are workers in Boston, Hartford, and Providence, cities with the highest concentration of BankBoston and Fleet employees and the most overlap. Analysts said cuts would come from branch consolidations, and the combination of back-office operations, with a focus on human resources, accounting, advertising, marketing, processing, mortgage loans, and account deposits.
With the Internet, ATM machines, and electronic transfers playing a greater role in banking, the two banks probably will reduce brick-and-mortar operations. At the same time, the combined institution is likely to hire more information technology workers as its reliance on new technology increases.
''Within five years, in fact, a more significant percentage of banking will be done on the Internet,'' Jacque said. Fleet and BankBoston, he said, ''will be looking at cutting fixed costs, and a big chunk of those costs will be branches.''
The merger, which comes a year after an attempt to reach a similar deal failed, combines New England's two largest financial institutions into one megafirm that will be required to divest a significant portion of its holdings in order to satisfy antitrust concerns.
''If the merger enables BankBoston and Fleet to become stronger competitors in the financial market, it could ultimately mean more jobs and better jobs,'' noted former US Secretary of Labor Robert Reich, a professor of economic and social policy at Brandeis Universtiy.
''The bad news,'' Reich added, ''is that in the short term, there is likely to be hardship for some people. Undoubtedly, some will be let go, including a number of middle-level managers. They are the ones who are often seen as most redundant when mergers take place.''
''This continues the trend of mergers that we have seen over the past year of very, very big bank deals,'' said Lisa Lynch, a professor of international economics at the Fletcher School. ''We can expect that there will be a lot of anxiety within Fleet and BankBoston about what this merger will mean to employees.''
The Fleet-BankBoston merger is part of a string of marriages that have swept through the industry in an ongoing push to create large national and international banks that can compete worldwide. As a result, bank layoffs have been widespread.
Chase Manhattan Corp., for example, the nation's third-largest bank, has announced the layoff of 4,500 workers, or 6.5 percent of its employees, since a 1996 merger with Chemical Banking Corp.
Meanhwile, the marriage of Bank One Corp. and First Chicago NBD Corp., announced nearly a year ago, has reduced the companies' combined work force of 100,000 by about 1,000 employees. More layoffs are expected.
At BankAmerica Corp., which confirmed earlier this year that it will eliminate and restructure jobs, as many as 18,000 positions, or 10 percent of the work force, will be laid off or transferred in the next several years.
For anxious workers at both banks, the health of the American economy provides some comfort. ''The good news [for Fleet and BankBoston employees] is that the economy is so strong that if you lose a job, there is always the possibility of finding five others,'' noted Jacque. ''So, if you are loan officer in your 30s, no big deal. If, however, you are in your 50s, there could be difficulties.''
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