THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Saturday, July 30, 1994 TAG: 9407300199
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: By TOM SHEAN, STAFF WRITER
LENGTH: Medium: 57 lines
Signet Banking Corp. plans to eliminate 1,000 jobs - almost 17 percent of its workforce - in a restructuring of its core banking operation.
The Richmond-based parent of Signet Bank said it expects to shed 800 jobs by year end and 200 more positions during 1995. The company's core banking unit employs 6,000, including 340 in Hampton Roads.
The Richmond-based parent of Signet Bank announced plans Friday that would cut out almost one of every five jobs in the restructuring of Signet, the state's fourth-largest bank.
It wasn't clear how many jobs would be lost in Hampton Roads.
``Over the next six months, we will look at every business practice within the core bank and pursue opportunities to make our business more efficient and more responsive to our customers' needs,'' Signet chairman and chief executive officer Robert M. Freeman said in a prepared statement.
On Wednesday, Signet announced plans to separate its credit-card operation from the banking company. The credit card business, which employs 2,000, mostly in Richmond, will become OakStone Financial Corp.
Signet expects to reduce the workforce of its core banking unit to 5,000 through early-retirement offers, transfers to the new card company, attrition, and layoffs, said Teri A. Temples, a Signet spokeswoman. She declined to say how many Signet employees will be eligible for the company's early-retirement offer.
Earlier this week, Signet said it will take a pre-tax charge of $60 million to $70 million against its third-quarter earnings to cover the costs of the spinoff and restructuring.
Between $25 million and $35 million of this charge will be used to cover the cost of its early-retirement and employee-severance programs, Temples said.
Signet's highly profitable card operations provided two-thirds of the company's net income in 1993. But the core banking unit has been a lackluster performer in recent years.
Signet's management has acknowledged that the company will be under greater pressure to generate strong earnings once its card operation has been spun off.
``Our employees are aware that this process will result in some layoffs for Signet, and we are doing everything we can to minimize the impact for them,'' Freeman said.
The stock market reacted favorably to the company's announcements, pushing up Signet's share price 3 1/4 for the week to 40 3/8 at Friday's close.
Signet's core banking unit has 240 branches in Maryland, Washington and Virginia, including 27 branches in Hampton Roads.
KEYWORDS: LAYOFFS by CNB