PNC Financial Services to Eliminate 5,800 Jobs
The Pittsburgh-based bank says it expects to save $1.2 billion annually with the cuts, which represent nearly 10 percent of PNC’s workforce of 59,595 employees.
Just how many cuts will be from the ranks of former employees of the Cleveland institution may never be known. PNC spokesman Fred Solomon said the bank intends to report on the job cuts “quarterly and business-wide” and will not specify how many job reductions involve former National City workers.
PNC said about 500 job cuts would come from branch divestitures in western Pennsylvania. National City previously announced plans to cut 4,000 jobs when it was a stand-alone institution. The vast majority of those cuts likely would not have come from its Cleveland headquarters, but an overlap in job duties with administrative employees of PNC probably will change which jobs are lost.
PNC said it expected to save $1.2 billion annually with the cuts, which represent nearly 10 percent of PNC’s workforce of 59,595 employees.
The Pittsburgh-based bank reported a fourth-quarter loss of $248 million, or 77 cents per share, compared with a profit of $178 million, or 52 cents per share, in the fourth quarter of 2007. Revenue rose 3 percent to $1.68 billion.
The latest fourth quarter included a $990 million credit loss provision, with $504 million related to the National City acquisition. PNC completed the purchase of National City on December 31.
Besides announcing the job actions, PNC said it also plans to re-enter the mortgage business, something it had only undertaken in a joint venture with Wells Fargo.
Solomon said he didn’t know how much of that business would be done by former National City mortgage employees. However, PNC chief executive James Rohr said in a conference call with securities analysts that the former CEO of PNC Mortgage had been rehired to join the company and that PNC has a team in place that is reviewing long-term strategies for the business.
The former National City has been doing a lot of refinancing work, he said.
PNC chief financial officer Rick Johnson expected the National City acquisition to be accretive to earnings by the end of 2009 due in part to National City selling off $5 billion in loans since PNC did its due diligence on the bank in August. National City also took a $1.8 billion charge-off.
Regarding the integration of the two banks, Rohr said decisions about systems are nearly complete. Branch conversion will begin toward the end of the year, and some redundant branches in southwest Ohio and western Pennsylvania then will be eliminated.
Rohr didn’t expect National City’s footprint in slower-growth markets to quell PNC’s growth. Business in Chicago, Indiana, St. Louis, Kentucky and Cincinnati is strong, he said.
Filed by Arielle Kass and Scott Suttell of Crain’s Cleveland Business, a sister publication of Workforce Management. To comment, e-mail firstname.lastname@example.org.
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