Fleet Stems Connecticut Job Losses

Responding to the Connecticut governor's complaints about job losses resulting from its merger with Shawmut National Corp., Fleet Financial Group Inc. said it would open a telephone banking center and place a New York City-based business unit in Connecticut.

Providence, R.I.-based Fleet said Monday that it plans to open a 24-hour telephone banking center in the Greater Hartford area and maintain it in Connecticut for at least two years.

However, it was unclear how this would affect 119 people employed in the Framingham, Mass., telephone customer service center Fleet will acquire with its $3.7 billion purchase of Shawmut.

Known as 1-800-SHAWMUT, the 24-hour telephone banking service is understaffed and needs to grow, analysts said.

Meanwhile, Fleet will also relocate its discount brokerage services unit, which is based in New York City, to Greater Hartford. Fleet Brokerage Services employs about 200.

"The net effect of both of those actions should preserve the total employment in Connecticut," said banking analyst Thomas Theurkauf of Keefe, Bruyette & Woods Inc.

The bank had planned to cut 1,200 jobs in Connecticut, out of a total of 4,500, once the deal closes.

Fleet spokesman Thomas Lavelle said the bank will maintain its back- office operations in Hartford.

Fleet said its in-market acquisition of Shawmut, which has headquarters in Hartford and Boston, will generate $400 million of cost savings as the 1,143 branches of the two banks combined are cut to about 900.

However, analysts said, the moves to placate Connecticut Gov. John G. Rowland may prevent Fleet from realizing its projected cost savings.

Mr. Lavelle countered that one way Fleet can make back some of these projected savings is by discontinuing the outsourcing of its telephone banking services to AT&T Corp. He would not specify how much this would save.

Gov. Rowland met with the chairmen of the two merging banks immediately after their agreement was announced in February. He said he would block the deal if the banks were serious about eliminating 1,200 jobs in Connecticut.

State banking regulators must approve the transaction. And the attorneys general in Connecticut and Massachusetts are reviewing antitrust implications of the merger.

Last week, Fleet chairman Terrence Murray and Shawmut chairman Joel Alvord met with Gov. Rowland and announced the agreement to save Connecticut jobs.

Massachusetts Gov. William Weld could not be reached for comment.

When the merger was announced, Fleet said it would move its headquarters from Providence to Boston. A spokeswoman in the Massachusetts governor's office said Gov. Weld is eager to get Fleet's headquarters.

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