Virtually every top bank executive will tell you that just about the toughest part of the job is firing people.
When the reason for firing is dishonesty, insubordination, or simple inability to do the job, it is a necessary step that does not bring about much soul searching.
But often those fired are just unlucky. A bank may need to cut costs, reduce duplication, and streamline operations for survival or after a merger.
(The people fired after mergers tend to be from the acquired bank. "Everything will be the same after the merger" should be taken with a grain of salt.)
No-fault firings are the toughest to handle. The most efficient case I have ever heard of took place at Bankers Trust Co. in New York.
The planning gurus had developed a chart forecasting the bank's future. There were three lines: two horizontal and steady, the third climbing rapidly. The steady lines were deposit growth over time and net interest expected to be earned per dollar of deposits. The soaring line was employees per $1 million deposits.
So one day, without notice, 600 officers were summoned to the bank's dining room to eat lunch with their respective supervisors. Then each supervisor told his or her guest:
We have good news and bad news for you.
First the bad news: You are no longer employed by the bank.
Now the good news: You will not have to take the subway home tonight. While we were eating, your desk and office were being cleared. When you leave this room you will go directly to the first floor, where all your possessions will await you in a limousine that will take you home.
The bank was afraid that given even 10 minutes to dig into their files and activate their computers, these employees could do damage that would take months to repair.
A friend of mine who ran a community bank in Indiana was kinder. A young lending officer had made so many bad loans that he had to be fired. But my friend was compassionate enough to let him remain until he could find another job.
Big mistake. Before leaving, the lending officer spitefully made enough additional bad loans to more than double the loss.
And here's one that I hope would not happen today.
The marketing officer of a major New England bank was having an affair with a top officer. They were using the chairman's office for some of their assignations.
He was reprimanded. She was fired.
