Signet to lose 1,700 jobs after merger Richmond hit hardest as First Union takes control

Downsizing follows trend

26 branches in Baltimore area set for closing


November 15, 1997|By Jay Hancock and Bill Atkinson | Jay Hancock and Bill Atkinson,SUN STAFF

Now it's Richmond's turn. Repeating an ordeal of banking consolidation that has become painfully familiar in Baltimore and other cities, First Union Corp. said yesterday that it will wipe out 1,700 jobs in its merger with Richmond, Va.-based Signet Banking Corp.

Baltimore, which has suffered the sale and downsizing of several of its own banks in recent years, won't go unscathed in the latest layoffs.

First Union plans to close 26 Baltimore-area branches -- 7 with the First Union nameplate and 19 with Signet's. Signet has about 1,000 employees in the Baltimore region. Local operations include a mortgage processing office in Columbia, downtown offices that house a commercial lending operation and a $1 billion asset-leasing department in a building bearing the Signet name.

First Union representatives were unable to say how many jobs will be cut in Baltimore.

"We have not even looked at what an employee impact will be," said Laurie Hedrick, a First Union spokeswoman. "We are hoping it will be minimal."

Most of the Signet retrenchment will come at the company's Richmond headquarters, said First Union spokesman Jeep Bryant. Signet had about 4,000 employees when its deal with Charlotte, N.C.-based First Union was disclosed in July.

"We have identified some overlapping positions that will be eliminated," Hedrick said. "We do hope we will be able to place most of the employees. We are not going to lie and say everybody will get a job."

In all, 97 branches will close in Virginia, Washington and Maryland -- 78 of Signet's and 19 of First Union's. All the closing branches are near others that will be part of the combined company. Branch employees were told yesterday of the closures.

Metro Baltimore will be left with 62 First Union branches after the consolidation is finished.

The branch closures are about what Wall Street had predicted. "Everybody's expecting them to close 100 branches or more," said David West, a banking analyst with Davenport & Co. in Richmond.

But First Union is now saying that its expected cost savings from the Signet merger will be less than expected. "We said we are looking at about a 50 percent expense savings from the merger," Hedrick said. "We actually think it could be lower than that -- about 36 percent."

Before closing branches, First Union needs regulatory approval, which usually has been forthcoming in merger cases. First Union is expected to close on the $3.25 billion Signet deal Nov. 28. Shareholders approved it Nov. 13.

First Union's cuts, which amount to 43 percent of Signet's work force, are another blow for Richmond, which is also being hurt by Wachovia Corp.'s takeover of Richmond-based Central Fidelity Banks Inc.

On the positive side, First Union said it will add a telephone service center, with 300 to 400 jobs, in Richmond. "And that is a low number," Hedrick said. "We really hope that in 1998 we can add more to that number. We'd like it to be 700." Such jobs, however, pay far less than the headquarters jobs First Union will be axing in Richmond.

When the merger and accompanying layoffs are over, First Union's Maryland operation will have a genealogy that includes not only Signet but First Fidelity Bancorp, which operated here ,, briefly after it bought the Bank of Baltimore. First Fidelity acquired Baltimore Bancorp, the Bank of Baltimore's parent, in November 1994, and Household Bank FSB's branches in the area in 1995.

Pub Date: 11/15/97

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