First Union Corp. is eliminating positions, particularly senior-level posts, in a reorganization of its general banking group.
The move is on top of a companywide cost-control initiative, known internally as Project Guarantee 2001, aimed at cutting expenses by $300 million to $400 million by reining in spending on supplies, travel, and entertainment, and by consolidating contracts with third-party vendors.
The shifts in general banking are intended to reduce layers of management at the Charlotte, N.C., company. In addition to cutting costs, the drive - one undertaken by other banking companies - is aimed at improving communication throughout the organization and with customers.
P. Sue Perrotty, the general banking group executive for Pennsylvania and Delaware, is one of those affected. Ms. Perrotty, who joined the company in its 1998 acquisition of CoreStates Financial Corp., was one of the highest-ranking women at First Union.
A spokeswoman in Philadelphia said that Ms. Perrotty was looking for other opportunities at First Union but that she "has not found a role that is a good fit for her."
Other general banking group executives have shifted responsibilities as their previous regional roles have been eliminated. They include Rob Hoak and Pete Jones, who shared oversight for the mid-Atlantic. Don Scott, First Union's Philadelphia market executive, also had his position erased in the restructuring; he may be reassigned within the company.
Rumors have been circulating for weeks of big slashes in branch and sales functions and in capital markets and capital management.
A First Union spokeswoman in Charlotte said: "Every unit is really focused on managing expenses, focused on the core markets and on customer service. Where the units identify functions that are no longer necessary, that may result in some sort of staff reduction."
First Union has been struggling with bad loans and expenses that have risen disproportionately to revenue growth, and its attempt to become more efficient is one reason for the job cuts.
The spokeswoman confirmed that 60 out of 1,300 positions were eliminated in the technology group on Monday but added that many of those employees would find jobs elsewhere in the group or the company.
Cuts were made last week in areas including human resources, she said, where First Union has begun to deploy software programs to replace employees.
Several other banking companies have undertaken similar projects. Bank of America Corp., also in Charlotte, said last year that it would eliminate 10,000 jobs, most of them in the middle management and senior management ranks that became swollen from a decade of acquisitions.
"The trend has been to get rid of those layers of management between the branch level and the executives overseeing the business lines," said David Hilder, an analyst at Morgan Stanley Dean Witter & Co.
The general banking group, which is what First Union calls its consumer and traditional commercial banking businesses, has put its 25 "area" markets into 19, forcing five more executives to look for new jobs within the company or go elsewhere.
In the New York region, for example, Tom O'Brien, area head for New York and Connecticut, has decided to retire. His territory has been consolidated with the New Jersey market. Jim Fitzgerald, who had been heading up the New York metropolitan region, is now area president for the combined territory.
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