Originally created 08/29/00

Wachovia cuts 1,800 positions

Wachovia Corp. announced Monday it plans to cut about 1,800 jobs - about 8 percent of its work force.

The sweeping restructuring plan, meant to cut expenses by $100 million a year, will result in about 10 lost jobs in the Augusta-Aiken area, Augusta President Robert Osborne said.

"We're going to be affected to some degree here," he said.

The announcement comes on the heels of similar cutbacks at two larger North Carolina banks, Bank of America and First Union. All three have been looking for ways to improve efficiency and raise their respective stock prices.

"The resource realignment announced today is another step in a thoughtful process that will make Wachovia stronger and more competitive," said L. M. Baker Jr., chairman and chief executive officer of Winston Salem-based Wachovia.

Job cuts will be spread throughout the company and will include all levels of professional staff. In the Augusta area, most job loss will occur as the company merges its once-separate mortgage business into its banking operations, Mr. Osborne said.

Wachovia will offer severance packages to ease the impact on affected employees. The company also said it would try to move affected employees into other positions before the layoffs take effect in 60 days.

"(Any laid-off employee) has priority over anyone else looking for a job at Wachovia," Mr. Osborne said.

Wachovia will take a pretax restructuring charge of $85 million to $100 million, primarily to cover the severance costs. Most of the charge will be taken in the third quarter.

Wachovia currently has 21,300 employees.

In June, First Union said it would cut at least 3,500 jobs under a similar belt-tightening move.

In late July, Bank of America said it would cut as many as 10,000 jobs to become more profitable and efficient through technology.

The banking industry has faced an uphill climb generating more revenue. Interest rate increases have made the cost banks pay for their money increase faster than banks have been able to increase rates for loans or other assets, analysts say.

Wachovia has assets of $70.8 billion and nearly 700 branches in Georgia, Florida, North Carolina, South Carolina and Virginia.


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