Bank One/J.P. Morgan to cut 10K jobs nationwide

[UpInArms]

http://columbus.bizjournals.com/columbus/stories/2004/01/12/daily25.html

J.P. Morgan Chase & Co. and Bank One Corp. plan to cut roughly 10,000 jobs from the combined company's 145,000-employee work force, executives said Thursday in interviews following the official announcement of their $58 billion dollar merger.


Bank One, one of the largest employers in Central Ohio with roughly 9,000 area full-time jobs, said Wednesday evening it had agreed to be acquired by New York-based J.P. Morgan in an all- stock deal that would create the country's second- largest financial services firm, with $1.1 trillion in assets. The company, to be called J.P. Morgan Chase & Co., would trail only Citigroup, which has $1.21 trillion in assets.

Jamie Dimon, Bank One's president and chief executive officer, cautioned on the cable channel CNBC that the cost-cutting plan did not call for immediate job losses for employees.

"Remember, there's 140,000 employees in America. It takes place over two to three years, so it's 10,000 jobs, not 10,000 layoffs," he said. "... We'll do it right with a lot of dignity for the employees."

...more...

how nice - starvation with dignity /sarcasm

[mbperrin]

1. Look at that *Bush job machine go!

nuff said

[hatrack]

2. Wow, that was fast!

They only announced the merger yesterday, and today, 10K jobs gone already! And the recovery rolls on . . .

[jayfish]

3. That Admission Alone Should Be Reason Enough...

for the FTC to scuttle this "merger"

Jay

[cthrumatrix]

4. but but the Job Czar said all was going to get better by 2003..????

[54anickel]

5. Let the merger-mania begin!

[Frodo]

6. I find that a tad hard to believe.

The only real overlap in the two institutions is Texas, where you might expect a fair number of branch closings. Perhaps a few in Delaware as well, but they still combine there for less than 10-12% of the market.

Obviously you lose some "HQ" jobs (and in a company that size it can be alot), but with the exception of corporate positions, I'd expect to see a couple thousand people cut over the next year. The rest could easily be handled by attrition.


Of course... 2,000 people is still a lot of suffering.

[area51]

7. 1984-speak

Jamie Dimon said:

"... `so it's 10,000 jobs, not 10,000 layoffs,´ he said."

Riiiight. And black is white, up is down, etc. And how many of the jobs left will be offshored to other countries?

[Frodo]

8. Ummmm. Area 51?

How does one "offshore" a banking job?

Can you run the drivethrough window from China?

I guess you could move a call-center, but that isn't a whole lot of people these days.


And I've been involved in LOTS of bank mergers where jobs were cut, but actual layoffs were minimal... though I doubt two monster banks can pull it off with HQ operations THAT far apart.

[Yavin4]

10. Whatever You Cannot Outsource, You Import Through Bush's Guest

worker program.

[mbperrin]

17. Proof, accounting, statements and many other bookkeeping

jobs can easily be offshored - just like any other telecommute - it's just a longer commute. I was around when Texas Commerce Bankshares was put together in the 70s and the finished holding company had half the employees the separate banks had within 18 months.

[Frodo]

19. Um... no.

I'll take your word for it that you have dome history in banking... but you don't seem to understand the positions you;ve listed.

Let's just take "proof operator". Every transaction you bring in (millions upon millions at big banks) before close-of-business MUST be on the system TONIGHT (ok today's Saturday... but you get the point). In order to do that, some person has to "encode" the check information onto the check so that a massive "reader-sorter" can scan the important information and post it to the computer.

There's only a few hours to make this happen. Your deposit needs to be courier delivered from your branch to a central location and be hand-processed then computer processed in the space of just a few hours. THERE IS NO WAY you are going do that overseas.

I guess if a bank had a proof operation really really close to the mexican border today they COULD move it across the border. But there really aren't any banks of size that meet that definition.

Statements and bookkeeping present similar problems. For a job to be moved offshore profitably, it need to be a job function where the human factor is the big expense. Statement processing is machine-intensive, not labor intensive. More importantly, POSTAGE is the big expense here. Moving the job to China would obviously greatly increase that cost (WAY beyond any savings) AND dramatically reduce service levels since statements would arrive in a week or two instead of a couple days.


Now since it looks like you're in Texas, you MAY still see a lot of downsizing. Both banks have a significant market share in TX and there are likely to be lots of towns with branches literally on the same street corner. That doesn't mean laying off an entire staff (you can't service twice the deposits with one staff - you need some expansion) but it PROBABLY does mean some painful layoffs (some banks do it better than others. I've seen it done with ZERO branch layoffs even with significant overlap AND still have a real cost-savings on the merger).

Other than Texas, these two banks hardly overlap at all. They may use the merger as an excuse to close unprofitable branches each must have, but those things happen eventually anyway if you aren't doing good business.

[Skittles]

18. LOL

trying to minimize the continuing, nonstop job losses. GOOD F***ING LUCK.

[Frodo]

20. Take it easy Skittles.

This is the way banking has worked for quite a while. The conversation really has nothing to do with the current employmnet picture.

The BIG bank mergers/layoffs were all in the late 90's and the overall employment picture was just fine then.

You and others here just missread the announcement. I've seen mergers with 2,000 + "job losses" but only a few hundred actual people laid off.

Banking has a fair amount of turnover in the types of positions that are redundant between banks. Say 10%-15% per year at a GOOD bank in a GOOD year. All you have to do is not replace the people who quit over the next few months (makes the next few months harder on everyone - but it's clearly worth it). Many good banks (& I have no opinion on the two involved here) take that well past conversion and may be significantly OVERstaffed in some departments for a year past merger. Then they just don't replace people who quit until the department gets down to the "correct" size. In a perfect world you can do it without laying off ANYONE.

But, of course, there will be some corporate departments where the entire department is redundant and can't be run from both NY and OH at the same time. THEN attriciton doesn't work because ALL of the positions are gone. So it's either re-locate to NY (I bet THAT's an "easy sell" lol), retrain for another position (probably not too many open) or take a severance package.

So it could EASILY be 10,000 job-functions cut over the next couple years but only 1,000-2,000 people laid off. The true test is how good JPMorgan has been in the past (What did Chase do when they bought them? relevant, but not as much as you think since they sat on top of each other in so many areas).

Either way, 2000 over 2-3 years does not a massive layoff make. Nothing to "minimize" here.

[Skittles]

21. no I won't F***ING take it easy

OK????????????????????

[Frodo]

23. no.

Actually, it's not "ok".


Deal with reality, not some spin. There is nothing here that can be taken to speak well OR poorly for the current economy.

[yellowcanine]

9. Holy cow, that is 10 times the number created in December

Way to go, pretzelboy.

[mbperrin]

11. kick!

nt

[Name removed]

12. Deleted message

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[Frodo]

13. Depends on where she works.

If she isn't in the corporate office or in Texas (my assumption) she's pretty unlikely to lose her job.

They just don't have a lot of overlap.

[Name removed]

16. Deleted message

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[baldguy]

14. And the recovery continues . . .

[0007]

15. The lies we eat, the lies feed the hatred we come to love...

and the beat goes on......

[bhunt70]

22. probably another one coming this week.

Etrade Financial and TD Waterhouse.

[Frodo]

24. I thought Canada wasn't allowing bank mergers?

Even if it comes to pass, I think that's a reletively tiny deal. I'm watching for the next big merger to be announced. Perhaps Wells Fargo and a medium-large East coast bank. Perhaps Wachovia or SunTrust. These things tend to go in spurts.

Wait too long and the new JPMorgan/Chase/BankOne will be looking to complete their footprint in the SE.