Chemical Unveils Plans For Initial Consolidations
Chemical Banking Corp. announced the first of a series of back-office consolidations and layoffs that will occur over the next several weeks as the institution prepares to merge with Manufacturers Hanover Corp.
The consolidations, expected to be complete by the end of this year, are small relative to the large-scale consolidations and subsequent staff reductions that are expected within the first year after the merger.
Chemical will probably close several large operations centers and eliminate thousands of positions to reach the projected $200 million in savings from consolidating technology systems.
Date Center Chosen
The company said Wednesday that it has designated Hanover's Wilmington, Del., data processing facility as a main technology center for the merged bank.
The year-old facility already does the processing for 100 of Hanover's applications and some of the operations for Hanover's Geoserve wholesale-services unit.
The center employs over 125 people.
It is not clear what applications will be moved from the banks' other data centers to Wilmington, and how many jobs might be eliminated at those other centers. A Chemical spokesman declined to comment.
The bank plans to add 70 people in Wilmington by the end of 1993, 20 of them during 1992, to accommodate increased processing volumes, said a Chemical spokesman.
Credit card operations for the merged bank will be centered at Hanover's site in Hicksville, N.Y.
The merged Chemical will have the sixth largest bank credit card portfolio in the country, with 4 million accounts and $6 billion in outstanding loans.
Credit card processing and administration for Chemical Bank is currently in Newark, N.J., and at Chemical Bank Delaware in Wilmington.
As a result of the move, 18 positions in Wilmington and 117 in Newark will be eliminated.
Choosing Hicksville as the site for credit card processing may indicate that the site will serve as the merged bank's key data center on Long Island.
Both banks have huge facilities within five miles of each other -- Hanover's in Hicksville, N.Y., and Chemical's in Jericho, N.Y. The banks employ 4,200 people between the two centers.
It is likely that one of these centers will be downsized and some operations will be merged from it into the other.
The two banks also have large data and item processing facilities in downtown Manhattan that may eventually be consolidated into a single site.