Webster Announces Massive Layoff Plan
By Howard French
Journal Inquirer
06/30/08
James C. Smith, chairman and CEO, Webster Financial Corp.
Waterbury-based Webster Financial Corp., which operates Webster Bank, plans to eliminate 240 jobs over the next 24 months, about half of those through attrition and the balance through outright layoffs.
The job cuts are the result of Webster’s “comprehensive revenue enhancement and cost reduction initiative, called the ‘OneWebster’ initiative,” Chairman and Chief Executive Officer James C. Smith.
“Webster expects to increase annual pre-tax earnings by $50 million within two years through actions that will save approximately $40 million in costs and achieve an additional $10 million in incremental revenue growth … as a result of this initiative,” Smith said.
Most of the plan will be executed during the next six to nine months, and the plan will be fully implemented in 24 months, he said.
“Webster will incur severance and other related charges of approximately $3.1 million in conjunction with these position eliminations, of which approximately $2.6 million will be recorded in the second quarter of 2008,” Smith said. In addition, Webster expects to incur approximately $10 million in other implementation costs, of which approximately $5 million will be recorded in the second quarter of 2008, he added.
“With these changes, Webster expects to meet its efficiency ratio target while improving its ability to deliver top quality customer service, reduce transaction times, and make banking easier for Webster customers,” Smith said.
“The large majority of Webster people will continue in their current or comparable assignments or will be reassigned to new jobs,” he said. Affected employees will have “the full support of Webster’s severance plan with outplacement services to help their transition, and Webster will consider them for future employment as the bank creates job opportunities in the future,” Smith said.
“One of the major successes of this effort was our ability to realize efficiencies equal to 10 percent of our cost base while 97 percent of our employees remain minimally impacted,” he said.
Webster will provide additional information about the cost-cutting plan “at or before its July 22 second quarter earnings announcement,” Smith said.
Webster Bank operates 181 branches and owns the asset-based lending firm Webster Business Credit Corp., the insurance premium finance company Budget Installment Corp., and Center Capital Corp., an equipment finance company headquartered in Farmington.
Webster has been struggling with declining profits, and in April announced a 30 percent slip in net earnings for the first quarter of its fiscal year to $24.4 million, down from $35 million in the comparable period a year earlier.
Smith blamed the declining real estate market and related factors for the financial performance.
Journal Inquirer
06/30/08
James C. Smith, chairman and CEO, Webster Financial Corp.
Waterbury-based Webster Financial Corp., which operates Webster Bank, plans to eliminate 240 jobs over the next 24 months, about half of those through attrition and the balance through outright layoffs.
The job cuts are the result of Webster’s “comprehensive revenue enhancement and cost reduction initiative, called the ‘OneWebster’ initiative,” Chairman and Chief Executive Officer James C. Smith.
“Webster expects to increase annual pre-tax earnings by $50 million within two years through actions that will save approximately $40 million in costs and achieve an additional $10 million in incremental revenue growth … as a result of this initiative,” Smith said.
Most of the plan will be executed during the next six to nine months, and the plan will be fully implemented in 24 months, he said.
“Webster will incur severance and other related charges of approximately $3.1 million in conjunction with these position eliminations, of which approximately $2.6 million will be recorded in the second quarter of 2008,” Smith said. In addition, Webster expects to incur approximately $10 million in other implementation costs, of which approximately $5 million will be recorded in the second quarter of 2008, he added.
“With these changes, Webster expects to meet its efficiency ratio target while improving its ability to deliver top quality customer service, reduce transaction times, and make banking easier for Webster customers,” Smith said.
“The large majority of Webster people will continue in their current or comparable assignments or will be reassigned to new jobs,” he said. Affected employees will have “the full support of Webster’s severance plan with outplacement services to help their transition, and Webster will consider them for future employment as the bank creates job opportunities in the future,” Smith said.
“One of the major successes of this effort was our ability to realize efficiencies equal to 10 percent of our cost base while 97 percent of our employees remain minimally impacted,” he said.
Webster will provide additional information about the cost-cutting plan “at or before its July 22 second quarter earnings announcement,” Smith said.
Webster Bank operates 181 branches and owns the asset-based lending firm Webster Business Credit Corp., the insurance premium finance company Budget Installment Corp., and Center Capital Corp., an equipment finance company headquartered in Farmington.
Webster has been struggling with declining profits, and in April announced a 30 percent slip in net earnings for the first quarter of its fiscal year to $24.4 million, down from $35 million in the comparable period a year earlier.
Smith blamed the declining real estate market and related factors for the financial performance.
Labels: Connecticut, Hartford, layoffs, Webster Financial
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