In an announcement that underscores a dramatic shift in the banking sector, First Union Corp. on Friday provided details of a cost-cutting program that it said would allow it to meet its earnings targets.

The Charlotte, N.C., banking company will take a $380 million restructuring charge in the first quarter, largely to cover the cost of cutting 5,850 employees, or 7% of its work force.

First Union plans to make up the charge with about $375 million in one- time gains throughout the year.

The restructuring is a departure from the acquisitive posture First Union has been known for, but was necessary, executives said.

"This will allow us to reduce operating expenses and position the organization for strong current as well as future performance," said John R. Georgius, president of the banking company.

In restructuring, First Union joins Citigroup Inc. and Republic New York Corp., among others, in streamlining operations to become more competitive. Banking companies are finding that they can no longer depend upon robust loan growth and a strengthening economy to fuel their profits.

And with Wall Street increasingly concerned about earning growth, First Union was compelled to come back with a second, more detailed account of its plans. Its shares have lagged behind those of its peers since it first disclosed in January that it had lowered its earnings target for the year. They gained in anticipation of Friday's announcement.

First Union feels it has gone far enough. "This is an exercise we wanted to do one time," Mr. Georgius said. "We don't want to do it again."

The move "allows us to reduce noncore unit costs to focus investment in the businesses of capital markets and retail delivery," Mr. Georgius said.

With the actions, "we are comfortable" getting back on track for 12% to 14% growth in annual earnings per share, Mr. Georgius said.

The effect is to "allow First Union to fund growth by freeing up expenses in its infrastructure," said Bradley G. Ball, a banking analyst with Credit Suisse First Boston.

The cuts are not too deep, said Ronald I. Mandle, a banking analyst with Sanford C. Bernstein & Co. "Most involve staff in non-revenue-producing areas. I don't think this will adversely affect their ability to compete with other banking companies.

"First Union is positioning to have good growth during the latter part of the year," Mr. Mandle said.

But another banking analyst said he believes First Union's problems go deeper.

First Union's troubles are "company specific" in terms of cost controls, said George A. Bicher, a banking analyst with BT Alex. Brown. Other companies "do not have to rely on large cost cuttings to rearrange their houses," he said.

Shares of First Union dipped 75 cents, to $54.50, for the day. They ended up from $53.125 a week earlier.

In a conference call with Wall Street analysts, Mr. Georgius offered specifics about a redeployment that First Union indicated several weeks ago was being planned.

The one-time gains will be $180 million from the sale of its electronics payments systems operation, $120 million from the sale of factoring assets, and $75 million from the sale of other assets during the year, possibly some branches.

First Union's restructuring charges will be taken in the first quarter, causing the company to miss analysts' first-quarter consensus estimate of 92 cents per share.

Analysts said they now believe the company will come in at 87 to 89 cents per share. First Union should meet analysts estimates of $4 for the full year, company executives said.

"The point is to fully cover the restructuring charge with a nonrecurring gain to meet our $4 share goal," Mr. Georgius said.

Most of the cuts are expected to occur in the early part of this year. "You'll see in the third and fourth quarters some very positive earnings trends," Mr. Georgius said.

Mr. Georgius also commented on possible interest in Fleet Financial Group's divestiture of branches in connection with its planned acquisition of BankBoston. "We would obviously look at branches they have in Connecticut and New York," Mr. Georgius said. "But we would not expect to bid on anything substantial" in New England.

He also discussed the banking company's subprime lender, Money Store. "We have had some short-term bumps in trying to get rid of this gain-on- sales issue but we think we're well positioned going into the year 2000," Mr. Georgius said.

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