WINSTON-SALEM, N.C. As Wachovia Corp. advances in its merger integration, it is taking great care to put a much more sensitive face on the process than its predecessor company First Union Corp. had in prior efforts.
Its sensitivity may be put to the greatest test in Winston-Salem, N.C., the headquarters of the old Wachovia.
Last summers merger of First Union and Wachovia is likely to cost Winston-Salem about 1,000 banking jobs over the next two years, but the new Wachovia is promising that job growth will resume in its former hometown when the merger integration is complete.
In two town hall meetings Friday, company executives told Winston-Salem employees this is how many positions would be eliminated as key administrative functions are shifted 80 miles south, to the merged companys main offices in Charlotte, N.C.
First Union acquired longtime rival Wachovia on Sept. 1 for $13.5 billion and took its name but clung to its own Charlotte headquarters. The merged companies originally projected a total of about 7,000 job cuts about half through attrition and they have stuck to that estimate in recent months as the integration progressed. A spokeswoman said Wachovia expects to hold similar town meetings periodically to inform employees of major developments in the merger integration. But the Winston-Salem meetings were considered a priority because of concerns in the city over the loss of the old Wachovia headquarters and employees anxieties about the fate of their jobs.
We thought it was important to go to Winston early on, said Mary Eshet, the Wachovia spokeswoman. While clearly there are still decisions being made, and any kind of numbers are subject to change, executives wanted to give employees a look ahead to 2004 and to reiterate and reconfirm Wachovias commitment to Winston as a very important center for the company.
Though many decisions remain and the figures could change, the currently envisioned cuts would shrink Wachovias employment in Winston-Salem from about 4,300 to about 3,300 when integration is finished in early 2004. The estimates are for administrative jobs only, and do not include figures for branch employees, private bankers, or workers who deal directly with customers, Ms. Eshet said.
At the town hall meetings, which attracted about 400 employees, Wachovia executives insisted that despite the cuts, the city would remain an important hub for the bank. Wachovia has already announced that it will run its wealth management and Carolinas retail banking operations from Winston-Salem.
For now, some administrative staff at the old Wachovia headquarters will support divisions being run out of Charlotte, such as technology, operations, marketing, and human resources. But ultimately, the company expects to create jobs in Winston-Salem again, Ms. Eshet said.
Once we complete this transition, and the resulting job reductions this will be a base to grow from as the company grows, Ms. Eshet said.
Fridays employee meetings were led by David Carroll and Robert McCoy, who are overseeing the integration, the largest such effort in either predecessor banks history. Also answering questions were technology and operations chief Jean Davis and wealth management executive Stan Kelly, as well as Carolinas banking chief Will Spence.
Now only one large bank, BB&T Corp, is headquartered in Winston-Salem, where about 1,100 of its 22,100 employees work. The city of about 195,000 is also home to R.J. Reynolds Tobacco, several smaller banks and thrifts, key operations of Chicago conglomerate Sara Lee Corp., and a major service center for insurer GMAC.
Gayle N. Anderson, the president of the Winston-Salem Chamber of Commerce, said she believes that there will be fewer job losses from the Wachovia merger than the company itself predicts. She said company officials have told her new jobs are likely to be added in coming years.
My prediction is that, theres no guarantees, but the net after we get through the next 24 to 36 months is going to be a loss of about 500 jobs, Ms. Anderson said.
Winston-Salem currently has about 11,000 financial services jobs, according to the local chamber of commerce. We are growing as a financial center, Ms. Anderson said, and added that she thinks the local economy can easily absorb any employees laid off by Wachovia.
So far, Winston-Salem operations have apparently escaped large-scale cuts. The company, which has vowed to take three years to finish the integration, will not begin branch consolidations in North Carolina until May 2003, and many systems conversions lie ahead. Wachovia has eliminated 1,905 positions, or about 27% of the projected 7,000, since the merger was announced, many by leaving vacant jobs unfilled.
But the pace of layoffs will pick up this year. Chief financial officer Robert Kelly said last week 2,500 jobs will be eliminated in 2002, and thousands more by 2004.
Some laid-off Winston-Salem employees may be offered work in Charlotte. On Jan. 14, the company announced plans to eliminate 157 jobs in Winston-Salem by moving some back-room operations in its wealth management unit to Charlotte. This would create 32 jobs in Charlotte, which laid-off employees can apply for, a spokesman said.
Charlotte is also feeling the post-merger job pinch, as Wachovia trims jobs there. And cuts could soon affect other cities where the combined bank has key operations including Atlanta, Philadelphia, and Jacksonville, Fla. but Ms. Eshet said Monday it is too early to know where the pruning would be done.
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