KeyCorp said Tuesday that it will fire as much as 11% of its work force, or 3,000 employees, by yearend 2000 and sell its credit card operations to improve earnings.

The moves are part of an effort the Cleveland banking company has undertaken in its struggle to match the performance of similar-size institutions. During a conference call, the bank told analysts that a number of cost initiatives were already producing results. For example, revenues from retail operations are on target to meet 8% growth projections this year, and KeyCorp expects 10% growth for the unit next year, it said. The $83 billion-asset company will take a $180 million pretax charge in the fourth quarter, which would be offset by a $190 million gain on the October sale of branch operations on New York's Long Island.

The restructuring aims at $170 million in annual cost savings, which would be reinvested in high-growth businesses including e-commerce services for business customers and asset management and retirement services, the bank said.

Analysts said they were pleased that KeyCorp was acting to slash expenses. Shares in the company have dropped 20% this year, and it missed the analyst consensus forecast in the third quarter by a penny because of weak revenues in investment banking and capital markets.

"They have needed to deal with earnings sluggishness," said Joseph Duwan, an analyst at Keefe, Bruyette & Woods. "This is a positive development."

Robert W. Gillespie, chairman and chief executive officer, said in a statement that the cost savings will enable KeyCorp "to capitalize on the opportunities created by passage of long-awaited financial modernization legislation." Mr. Gillespie was not available for further comment Tuesday, the spokesman said.

KeyCorp also told analysts that it expects to boost fee income as a percentage of total revenues from 41% at yearend 1999 to 45% by the end of 2000 and 50% by yearend 2002.

The restructuring includes a management realignment of three businesses: retail, corporate and specialty finance, and Key Capital Partners, a unit that includes asset management, capital markets, insurance, and investment banking. A spokesman would not provide details about where the job cuts would take place, but said attrition may account for some of them.

In addition, KeyCorp plans to outsource some technology functions, discontinue the use of certain software programs, and sell office buildings.

The sale of the card operations was widely anticipated, analysts said, though the company would not offer a price tag for the unit, which includes $1.3 billion of managed receivables. Investment bankers said the portfolio could fetch around $200 million.

KeyCorp also said it wants to expand in Salt Lake City, Denver, Seattle, and Portland, Ore. The company said that effort would be accelerated with savings from the sale in October of its Long Island branch operations to Dime Bancorp.

Overall, KeyCorp said, the restructuring will add 3 cents to 8 cents per share to earnings for yearend 2000 - a number that takes into account a per-share reduction of 7 cents in revenues from the absence of the Long Island branches. Analysts had expected earnings per share of $2.57 for 2000.

Some analysts said they were concerned those projections did not include an estimated 5-cent-per-share hit to earnings from the absence of the credit card business. The bank told analysts in the conference call that it expects to make up any blow with additional revenues from its home equity business.

Still, some analysts said they were concerned that KeyCorp may still not be able to generate revenues after the belt-tightening, and pointed out that the company has made several attempts to do so in the last few years. "They do well with cost cutting," said Gerard Cassidy, an analyst at Tucker Anthony Cleary Gull. "The real challenge is to improve revenues."

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