Great Western Bank, the lead subsidiary of Chatsworth, Calif.-based Great Western Financial Corp., said it would eliminate 500 branch jobs in 1995.

Analysts said the plan is part of a three-stage reorganization begun last year.

One hundred fifty-four people were laid off last week from the bank's California branches, and 83 lost their jobs in Great Western's Florida offices, according to spokesman Steve Hawkins. Great Western has 6,500 people working in 419 branches in the two states. No branches are slated for closing, according to the bank.

Two hundred and eight people in the California branches received pink slips the same day but were immediately offered new positions elsewhere in the company, Mr. Hawkins said. The rest of the 500 positions slated for elimination will come from attrition.

The company is in the process of centralizing customer service at two high-tech telephone centers, one in California and the other in Florida. The centers will handle telephone calls, mail processing, and automated teller machine account balancing, the bank said.

"In today's competitive business environment, our banking branches must have the capacity to increase sales by marketing the wide variety of financial services Great Western Bank now offers," said Curtis J. Crivelli, executive vice president, retail banking. "This reorganization frees branch personnel from many routine operational tasks so that they can focus on sales and service."

Richard Strauss, a banking analyst with Goldman Sachs & Co., said these most recent layoffs give Great Western "a chance to do away with the extraneous branch-level employees and move them to the phone centers." He called the move "very encouraging" in light of the bank's "rather lackluster" 66% efficiency ratio.

Other Wall Street banking analysts were also pleased with the announcement, although none cited the reorganization as a reason to upgrade earnings expectations.

Because the bank expects nearly half the jobs will be eliminated as a result of attrition and a hiring freeze, there will not be a material impact on earnings from severance charges. And Mr. Hawkins said expenses saved will be minimal.

Last year, the bank announced that it would seek to improve its efficiency ratio to 55% by chopping 1,000 back office jobs from the payroll. Keefe, Bruyette & Woods analyst Thomas Theurkauf estimates that Great Western saved $60 million from that effort and will get another $40 million in savings from it this year.

But the back office reorganization is separate from the branch cuts announced last week. "In 1995," says Mr. Theurkauf, "attention has turned toward the delivery network, the branches. It's a natural extension of their review of the entirety of their cost base." The cost base of the branch system is $400 million a year, he noted.

Bruce Harting of Salomon Brothers said the next step would be to cut staff in the "front office, which is yet to come."

Mr. Theurkauf pointed out that Great Western's reorganization comes at a time when all California thrifts are under increased margin pressure because of rising interest rates. "It's a difficult revenue environment," he said. "When interest rates go up, costs are going up but loan rates lag."

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