Employees at Pacific Century Financial Corp. will learn next month whether they will keep their jobs.

That is when the company is to distribute notices to each of its 5,000 staff members describing upcoming organizational changes.

The letters will continue a restructuring effort begun by the Honolulu-based banking company in February 1998. One goal is to improve a bloated efficiency ratio of 65.67% to 55% by yearend 2000. According to a company executive who asked not to be named, job cuts are expected to be minimal.

"I would be very surprised if they cut more than a couple hundred," the executive said. Axing 200 jobs would cut Pacific Century's work force by 4%.

The $14.6 billion-asset company has been gradually reducing its staff largely by attrition and a hiring freeze -- since the restructuring began. President and chief operating officer Richard Dahl said in an interview Tuesday that so far it has cut roughly 400 jobs and closed 27 of its 100 branches.

Mr. Dahl acknowledged there would be a new round of cuts, but he called any estimates of the number of people to be affected "pure speculation."

To dismiss as few people as possible, the company has been leaving vacant positions unfilled for the past several months, according to the executive who asked to remain anonymous. Pacific Century will attempt to place workers whose positions are eliminated next month into these jobs. There are about 130 such positions, he added.

The most recent phase of the redesign project, which was shepherded by the corporate reengineering firm Aston Associates, was launched in March. It is expected to result in a host of internal restructurings and business line changes.

The recommendations that have been gathered and are being reviewed by top brass are numerous and varied. In fact, according to the executive who asked not to be named, they filled four binders that were about eight inches thick.

Mr. Dahl declined to detail any recommendations, mentioning only that his company needs to spend more time, talent, and money on electronic commerce.

Top management has been tight-lipped about exactly which changes will actually take place, according to the unnamed executive. "They have been playing this extremely close to the vest," he said. "They don't want to talk about the options so as to avoid harmful rumors."

The secrecy is expected to end Sept. 13, when managers are slated to hand out envelopes to employees, each presumably containing information on the fate of each worker's job. Managers will meet with their employees for several hours during the day to brief them on the changes, the executive said.

In the meantime, employees have been fretting about the redesign project. In an attempt to assuage their fears, management handed out "Who Moved My Cheese?" a book by Spencer Johnson about coping with change in the workplace.

"People need tools to help them deal with anxiety," Mr. Dahl said. "Our people have done a good job of separating morale from anxiety issues. Morale is strong because our people know why we are doing this." Analysts said the results of the banking company's efficiency push could be aided by an improving local economy. Tourism and housing prices have been climbing slowly, and the Asian economy has rebounded, said David H. Winton, an analyst with Keefe, Bruyette & Woods in New York.

"To get to a 55% efficiency ratio, it helps if you have a little wind in your sails," he said. "There are signs things are changing."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.