NationsBank Corp. plans to eliminate about 1,200 jobs in the Baltimore-to-Virginia region as it merges with MNC Financial Inc. over the next 18 months.
The company said yesterday that more than half of the cuts would stem from the closing of its Hyattsville operations center, whose functions would be split between Baltimore and Richmond.
The Charlotte, N.C.-based NationsBank said the lost jobs, which amount to 10 percent to 12 percent of the positions in the region, represent all of the reductions expected from the acquisition of MNC. That deal was completed Friday.
MNC's operations center in downtown Baltimore, which employs 2,000 people, would remain largely unscathed and could actually enjoy a net gain of about 50 jobs.
Most of the job eliminations are scheduled to begin in eight to nine months, though the number of people who will be put out of work is expected to be far lower because of attrition and opportunities to work elsewhere within NationsBank.
Except for employees in the bank's branches, where closings will not be announced for several months, all employees whose jobs are to be eliminated because of the merger have been notified this week, said Daniel G. Finney, a NationsBank spokesman in Baltimore.
The cuts, which had been expected as NationsBank, the country's fourth-largest banking company, weeds out redundancies in its newly enlarged banking system, continue a string of white-collar layoffs in Maryland over the past few years.
MNC once employed more than 12,000 but began slashing its work force three years ago as it struggled to survive the effects of failing commercial real estate loans. Employment at MNC, formerly the state's largest banking company, had fallen to about 7,700 as of Friday.
Banking industry losses
The banking industry has contributed to the Baltimore-Washington region's sharp reduction in white-collar employment since the recession. Of the more than 21,000 jobs Maryland lost last year, 1,700 were finance, insurance and real estate jobs.
As banks have embarked on a nationwide drive toward consolidation, they have typically kept costs in check by reducing employment in areas that are able to serve both companies in mergers.
The hardest-hit employees have been those working in areas such as operations, which includes clerical work such as servicing account statements, processing checks and sorting the mountains of paper banks generate every day.
Of the 1,200 positions being cut by NationsBank, 629 will be eliminated in Hyattsville as the company prepares to close its operations center there.
"The consolidation of the NationsBank regional operations center Hyattsville into the larger facility in Baltimore, which was MNC's principal operations center, is a business decision which we believe will, over the long run, enable us to provide the highest level of customer service," said J. Harold Chandler, president of the newly named NationsBank Mid-Atlantic Banking Group, which includes Baltimore, Washington and Northern Virginia.
Baltimore operations center
The status of the Baltimore operations center was welcome news to a city that appeared to be given a secondary role in NationsBank's Mid-Atlantic region. The bank in this area will be run by Mr. Chandler, who has been based in Bethesda, although he will have offices in both Baltimore and Washington.
Earlier this year, the company announced that Frank P. Bramble Sr., MNC's president and chief executive officer, would be shifted out of the bank's day-to-day operations, which left some in the area with the impression that Baltimore would be the loser in the merger process. Mr. Bramble, though named "senior banking executive" in Maryland, has been charged with improving profitability in the company's banking operations nationwide.
Of the 2,000 people in the Baltimore center, located on North Calvert Street, about 1,700 are operations jobs and would not be affected by the merger, the company said.
However, the 300 other positions, in the higher-paid computer programming and data processing jobs, will be eliminated. They will be offered positions in Richmond, where NationsBank runs one of its two large data-processing centers.
"We will try to place as many displaced associates as possible in other jobs throughout the NationsBank system," Mr. Chandler said.
Those who agree to transfer out of the area will be given relocation assistance. But people who choose not to move from Hyattsville to Baltimore will be let go without severance pay once the consolidation takes place, probably after at least six months, according to Mr. Finney.
He said that the rest of the job losses will be spread among headquarters functions, such as the marketing, legal, treasury and finance departments, and in the branches. NationsBank will announce how many branches it plans to close by the beginning of next year.
Aside from the operations and corporate staffs, the losses were expected to be heaviest in the Washington suburbs of Maryland, where NationsBank and MNC had more branches in proximity to each other.
NationsBank, which now has about $140 billion in assets and operations in nine states and the District of Columbia, has said it expects to save $100 million a year in operating expenses as a result of the MNC merger, which would amount to about 23 cents a share. It has predicted the deal will increase per-share earnings as early as next year. Last year, the company earned $4.60 a share.