LaSalle Bank customers won’t just see a name change at their local bank branches, Bank of America has announced plans to layoff 2,500 workers in Illinois and 1,500 in Michigan as part of the merger, according to Portfolio.
Buying LaSalle will make BofA (NYSE:BAC) a dominant player in Chicago for the first time. At present, BofA has less than 2 percent of that market’s deposits, according to the Federal Deposit Insurance Corp.
BofA has added 56 branches in Chicago in the past four years. With the LaSalle purchase, it will get 411 branches, 17,000 commercial-banking clients, 1.4 million retail customers and 1,500 ATMs in the Chicago area, Michigan and Indiana.
The deal also will mark BofA’s retail-branch entry in Michigan. BofA will have 264 offices there and be the state’s largest bank, with a 23 percent share of the market’s deposits. LaSalle also has six branches in Indiana.
The decision to lay off the workers got BofA immediate rebuke from U.S. Sens. Dick Durbin and Barack Obama, both Illinois Democrats. The pair on Monday sent a letter to Kenneth Lewis, chair of Bank of America’s board, in which they urged Lewis “to reconsider the scope and timing of these layoffs.”
From a consumer’s perspective, does this bother you? Or is one bank/banker just as good as another?
“…a high percentage of the layoffs will be in contacted positions, such as security. LaSalle has it’s own security team to handle all of their banks, while BoA contracts out. That contract will then need to be applied, but many of those security guards will be sought after to retain their same roles during the transition, though rehired by various contractors. While they have been “laid off” they will be retaining similar roles and responsibilities.”
Said little bird also provides an internal B of A memo about the transition:
LaSalle Bank transition team identifies layoff target projections
24 Sep 2007
Bank of America is on track to close on the LaSalle Bank transaction in the first week of October, when it recognizes “Legal Day One.” On that day, Bank of America and LaSalle Bank will operate as a single legal entity.
Even after Legal Day One, the transition team will continue its assessment of ongoing operations to determine how best to integrate the two companies and provide maximum value to associates, clients and customers, and shareholders.
When the purchase was first announced, Bank of America said that it expected $800 million in after-tax cost savings in this transaction. The company has noted since then that the cost savings will involve layoffs. The transition team’s current projection is that there will be approximately 1,500 layoffs in Michigan and 2,500 layoffs in Illinois. These reductions will occur over the next two years.
The company will strive to find new opportunities within the bank for associates who are affected by these changes. Affected associates will be provided career support resources, extended benefits and severance pay.
“Layoffs and consolidations are never easy but we felt it was important to communicate with associates immediately when this information was available,” noted Jim Eckerle, Transition executive for Bank of America. “As is always the case, we will work closely with affected associates and communities to minimize the impact of these changes.”
Specific affected positions have not been identified; nor have individual affected locations. Additional details to this preliminary assessment will be provided later in the assessment.