The Federal Deposit Insurance Corp. will lay off 110 permanent employees next year as part of a plan to cut its work force of 9,800 by 14% during 1997.

Roughly 1,175 temporary employees will leave the agency next year as their terms expire. The balance are expected to accept buyouts or quit after turning down transfers to other cities.

In conjunction with the downsizing, the FDIC will consolidate its divisions of liquidation and resolutions.

Over the next four years, the agency wants to cut 1,090 permanent jobs from these two divisions along with the FDIC's legal department. By 2001, the FDIC hopes to be down to 6,500 permanent employees.

The FDIC board unanimously approved the plan on Tuesday, and employees were informed of the cuts by electronic mail that afternoon.

Because of ongoing negotiations with the National Treasury Employees Union, which represents about 5,000 of the agency's workers, FDIC Chief Operating Officer Dennis F. Geer declined to say how much the job cuts would save, except to say that savings would be significant.

"The cuts are a direct result of a healthy banking industry," he added. The FDIC, like other bank regulators, has been downsizing to adjust to fewer bank failures and more bank mergers.

The 110 layoffs will be concentrated in the FDIC's Atlanta and Chicago offices, and will begin sometime in the second quarter.

The buyout package will be offered to employees next month. But it will not be as generous as the six months' salary and health benefits accepted by 945 FDIC workers last year.

The division of depositor and asset services and the division of resolutions will be merged into the new division of resolutions and receiverships, effective Dec. 8. John Bovenzi, who heads asset services, will run the new division.

Over the next year, the new division will consolidate most of its field operations in Dallas and will shut down its offices in San Francisco, New York, Chicago, Atlanta, and Franklin, Mass. The agency's resolution operation in Boston will be eliminated in 1998.

The FDIC said it may close its liquidation operations in Irvine, Calif., Hartford, Conn., and Jersey City in 1998 or 1999.

The consolidation also will result in the loss of legal and paralegal jobs in Chicago, Atlanta, and Franklin.

FDIC lawyers in Washington won't be laid off next year, because of the increased work load from litigation resulting from the recent Supreme Court decision on supervisory goodwill. The FDIC is participating in 46 cases.

Other agency divisions aren't likely to see substantial job cuts, officials said.

However, the supervision division has identified 21 offices throughout the country where it is "severely overstaffed," according to a 13-page memo the FDIC released. The FDIC plans to offer buyouts to all examiners in those offices who are not managers. If buyouts aren't effective in cutting staff size, the division may transfer examiners to other offices, according to the memo.

The agency will try to do "everything it can" to cushion the blow of job cuts, Mr. Geer said.

Displaced workers will be offered the chance to re-train as examiners, he said. Eventually, the FDIC expects to have about 150 professional and supervisory jobs open in Dallas with the new resolutions and receiverships division.

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