For C&S Workers, a Sense of Deja Dread
ATLANTA - At a recent pep rally for employees of C&S/Sovran Corp., chairman Bennett A. Brown veered from his upbeat speech to confirm his troops' worst fears.
"We will need to reduce and streamline in order to gain efficiencies," Mr. Brown said.
The streamlining will eliminate some 16%, or 9,000 jobs, from the combined companies' 57,000-person work force. Areas of duplication include branch networks in Florida and South Carolina and various operations including mortgage banking, leasing, credit card, cash management, trust, credit administration, and international trade finance.
Round 2 of Layoffs
C&S/Sovran employees no doubt experienced a sense of deja vu as they listened to Mr. Brown. Most of them were survivors of the consolidation that took place when Atlanta's Citizens and Southern Corp. merged with Norfolk, Va.-based Sovran Financial Corp. The merger resulted in the elimination of 1,000 jobs.
"Basically, all the same people that worried about their jobs the last time will have to worry about them again," said a former C&S executive who left shortly after the Sovran merger.
Atlanta Recruiters Busy
C&S/Sovran employees are not sitting around waiting for the ax to fall. Executive recruiters in Atlanta report a flurry of phone calls in recent weeks from mid-to upper-level C&S/Sovran executives.
"We have certainly seen, more than usual, people that called and said, |Hey, if there's an opportunity, I'd be interested," said Joseph T. Spence, managing director of Russell Reynolds Associates Inc.
Some executives have already jumped ship. One day before NCNB and C&S/Sovran announced their merger, Patrick L. Flinn and John E. McKinley joined Atlanta-based Bank South Corp. Both were longtime Citizens and Southern employees.
Mr. Flinn, who was appointed Bank South's new president and chief executive, had been C&S/Sovran's group executive vice president in charge of real estate and mortgage banking in Washington. Mr. McKinley, 47, who became Bank South's senior executive vice president and chief credit officer, held a similar position at C&S/Sovran.
Mr. Flinn, 49, said he joined Bank South because it afforded a "great opportunity" and not because of any problems with the merger. Mr. McKinley could not be reached for comment.
Coming to Terms with Merger
Meanwhile, lower level C&S/Sovran employees seem to be taking the merger in their stride. They realize Nations-Bank, the $118-billion asset bank that will result from the merger of NCNB and C&S/Sovran, will surely be a survivor as the banking industry accelerates its consolidation.
"The stronger the bank is, the more solid the situation is for the employees as well," said Louise Lindall, a line employee at C&S/Sovran's branch in Cape Coral, Fla.
In Belvedere, S.C., a C&S/Sovran branch operates a mile down the road from two NCNB branches and another C&S/Sovran branch in the neighboring town of North Augusta. Customer service representative Susan Long wonders whether there will be room for all these branches, and "how it will affect me."
But she appreciates that the company is keeping branch employees updated on the merger. "Everybody's pretty positive about it," Ms. Long said.
C&S/Sovran has clearly gone to great lengths to keep open lines of communication to its employees. "We received a lot of literature on [the merger], keeping us abreast of everything that's gone on," said Ms. Lindall in Cape Coral.
The company's emphasis on attrition to produce most of the savings has been particularly encouraging. "I don't believe there's going to be 9,000 people walking the street the day they merge. I think normal attrition will take care of it," said Marlyn Jones, a C&S/Sovran branch employee in Land O' Lakes, Fla.
But laid-off workers will face grim prospects. The McKinsey & Co. consulting firm estimates the banking industry will shed 300,000 jobs during this decade, on top of the 60,000 employees lost between 1986 and 1990. Career counselors recommend looking at other options.
We emphasize for anyone coming from the banking companies to really sit down and look and see if there isn't some other thing you can do," said Joan Learn, president of The Greenwich Group, a career out-placement firm in Greenwich, Conn.
Ms. Learn said about one-fourth of her banker clients end up starting their own businesses, usually in the consulting field. For people who insist on staying in banking, relocation to another part of the country must be considered.
No Diplomatic Niceties
NationsBank will likely be a lot more aggressive than C&S/Sovran in cost-cutting, since NCNB chairman Hugh L. McColl enjoys complete control of the merged bank's board and management structure. Whereas C&S/Sovran set up committees carefully balanced between its two constituent banks to determine how to downsize departments, NationsBank requires no such diplomatic niceties.
But that does not necessarily mean that NCNB will favor its own employees in the merger process. Mr. McColl has publicly pledged that neither company will bear the brunt of the merger cost-cutting and industry experts expect him to live up to that promise.
"It is one of the most important elements in the transaction, once you get past the structure of the deal, that [Mr. McColl] do everything in his power to make sure he retains the talented people in the organization," said Mr. Spence, with Russell Reynolds in Atlanta.