6,200 Layoffs Could Be Just the Start of Cuts
The initial estimate of job cuts at a combined Chemical Banking Corp. and Manufacturers Hanover Corp. is 14%, or 6,200 employees, but the tally could climb considerably higher.
Bank officials said Monday that the consolidated company would cut expenses by $650 million a year beginning in 1995 and that half would come from personnel cuts.
But to meet that target, the behemoth might have to make even deeper cuts than projected in its 45,000-employee work force, several analysts said.
Layoff Estimate Doubted
"I think the numbers are conservative," said James McDermott, an analyst with Keefe, Bruyette & Woods Inc.
"Fourteen percent is not a high number - there may be more," said Raphael Soifer, an analyst at Brown Brothers Harriman in New York.
In another large New York merger, Bank of New York Corp. and Irving Bank Corp. ultimately eliminated one out of three jobs, or 6,300 positions.
Talk of the impending layoffs roiled the New York offices of Chemical and Manufacturers Hanover on Monday.
Worries Are Voiced
At a Chemical corporate office in lower Manhattan, "People are really worried," said an employee in the management reporting division who asked not to be identified. He said rumors were swirling that his division would be dropped because Hanover's is superior.
Many analysts suggested that the brunt of the job cuts would be made at Manufacturers Hanover, whose president, Thomas S. Johnson, is stepping down to facilitate the merger.
"Chemical comes out surprisingly strongly," said Christophe Kotowski, an analyst for Oppenheimer & Co., New York.
John F. McGillicuddy, chairman and chief executive of Hanover, who will retain those posts, said 95% of the job cuts will be in New York State.
70 Overlapping Branches
The cuts will be heavily concentrated in Manhattan as the banks trim branch networks and eliminate redundant computer operations. Mr. McGillicuddy said the two institutions have 70 overlapping branches, mostly in Manhattan.
Mr. McGillicuddy said a hiring freeze will begin tomorrow, and some cuts will be made through attrition. He called the 6,200 job cuts his "best estimate."
A Chemical spokeswoman said she could not provide a target date for the job cuts.
Layoff Talk Nothing New
Both banks have pared staffs dramatically since 1987, when Chemical boasted 28,597 employees, and Manufacturers Hanover had 29,125.
Hanover has slashed its staff by 17% since 1988, to 19,177. And Chemical crossed out 2,400 jobs in 1990.
A Chemical spokeswoman said an employee hot line will be operating by Friday to answer job-related questions.
Ellen Braitman contributed to this article.