The Federal Deposit Insurance Corp. board on Friday voted to cut the agency's payroll 6% by yearend 1999, to 7,241.
The bulk of the 419 job cuts are to come from the supervision division, which will shrink by 159 employees, to 2,585; the legal division, which will drop 124 staff members, to 882; and the finance division, which will lose 50 jobs, to 539.
Despite cutting more than 400 jobs, the FDIC board did not reduce the agency's budget. Chairman Donna A. Tanoue and the three other board members set the 1999 budget at $1.2 billion, the same as in 1998. Chief Financial Officer Frederick S. Selby said an across-the-board pay raise in 1999 and the hiring of more than 200 examiners late this year made cutting the budget difficult.
Year-2000 concerns prevented the board from making additional staff cuts. Just over a year ago, internal projections had suggested the agency would shed 850 employees by yearend 1999, more than twice as many as were agreed to Friday.
When making those initial projections, analysts did not know the supervision staff would need to do on-site, year-2000 examinations at about 6,000 banks.
They also were unaware that-in anticipation of possible year-2000- related bank and thrift failures-the board would postpone closure of the Hartford, Conn., field office, which has 411 employees and specializes in resolving failed institutions.
An FDIC official said the agency is still on track to reduce its staff to about 6,300 by yearend 2001.