WARRENVILLE, Ill. – Members United Corporate FCU, which built itself into the second-largest corporate credit union through several mergers, continued to shrink its expenses with an additional 27 lay-offs, as its capital hovers just above insolvency.
The latest lay-offs will occur over the next 30 days and amount to the third round of staff reductions since 2008. During that time almost half the corporate’s 327 staff, a total of 156 employees, have been terminated in an effort to cut expenses, and at least one office, the Minnesota branch, has been shuttered. The latest round of cost-cutting will include a closure of the corporate’s Indiana office.
After accounting for severance and other related expenses, the latest job cuts will save an estimated $2 million a year, according to a letter to members from Joseph Herbst, president of Members United.
At the end of July the $9 billion corporate said it had just $14.6 million in member capital shares and $3.9 million of retained earnings, as the vast majority of its capital has been erased from losses on its investments over the past two years.
The new lay-offs comes as NCUA is preparing to approve a new corporate regulation later this week which is widely expected to precipitate a consolidation of the corporate network.
Members United built itself into a $13 billion corporate through a series of mergers, combining Mid-States Corporate CU with Empire Corporate FCU, then acquiring Central CU Fund of Massachusetts, the nation’s oldest corporate.
