StellarOne (STEL) in Charlottesville, Va., is planning to eliminate about 4% of its workforce, or 34 full-time jobs, as part of an overall cost-cutting effort that it says would save the company up to $2.4 million a year.

O.R. Barham Jr,. the president and chief executive at the $2.9 billion-asset StellarOne, said Monday that the job cuts mark the first phase of an efficiency initiative designed to make the company more competitive and more nimble. StellarOne is also planning to realign and relocate certain functions, but it said that 75% of the overall savings in the first phase will come through reductions in salary and benefits costs.

"While it is a difficult decision to eliminate positions in our talented and dedicated workforce, some level of immediate organizational restructuring was necessary as a first step to ensure we have allocated resources to be effective and align with our business strategy," Barham said in a news release.

StellarOne said it would take a $1 million charge to earnings this quarter to cover severance-related costs. It expects the savings to kick in next quarter.

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