PASADENA, Calif.-With 2009 projected to result in another net operating loss, Wescom Credit Union is cutting 175 positions and consolidating two branches.
Darren Williams, president and CEO of the $3.4 billion credit union that serves 346,000 members throughout Southern California, said in a prepared statement released Jan. 23, "Over the past week, we have made extremely difficult decisions that unfortunately have impacted some of our employees. While never easy, these were actions we needed to take to fulfill our responsibilities to our members and support the continued success of our organization. We are working closely with our employees to provide them with support through this transition."
A Wescom memo obtained by CU Journal, said the ongoing recession, "will continue to have a significant negative impact on our financial performance." Management expects "higher than normal credit losses" will continue into 2010. "Even when we see losses begin to decline, it is not likely that they will quickly return to the levels we experienced in the past. It will probably be the second half of 2010 before we see loan losses level off."
Williams said Wescom is seeking to reduce 2009 operating costs by 14%. The branch closures, which follow the shuttering of 12 branches in 2008, involve its Santiago Hills and Chula Vista locations and are effective March 6. Staff will be transferred to other branches.
Wescom said the reduction of 175 positions will be accomplished through a combination of open positions being eliminated, attrition and layoffs. To function with significantly less staff, the management team has been asked to concentrate on the theme of "Back to Basics," the memo advised. "We will continue to provide our members with an exemplary service experience and in order to do so we will need to streamline in many areas."
Wescom's most recent move comes after two rounds of workforce reductions in 2008. Early in the year 110 positions were eliminated, but through attrition it was achieved with only 20 actual layoffs. In August another 100 positions were eliminated, 11 branches were consolidated and Sunday hours were discontinued.
After the second round of layoffs, Williams told CU Journal, "The housing market in Southern California is the primary problem," along with rising unemployment and high energy prices hurting consumers.
Wescom serves a seven-county market, from San Diego to Santa Barbara, an area that includes many neighborhoods hit by significant numbers of foreclosures.
