Wachovia cuts expected to have little impact on Columbus operation

Jul 23, 2008 (Columbus Ledger-Enquirer - McClatchy-Tribune Information Services via COMTEX) -- WB | Quote | Chart | News | PowerRating -- Wachovia Corp. said Tuesday it is responding to the deteriorating housing market and huge earnings losses by cutting 6,350 employees -- most of those in its mortgage offices.

But there should be minimal impact in the bank's Columbus operation, which now employs 200 overall, said Greg Allmendinger, area president who is responsible for 17 branches in and around the city.

"We're continuing to evaluate all aspects of our business and will make changes appropriately. But in our market, for Columbus, I see little to no impact," said Allmendinger, who became Wachovia's top local executive nearly four months ago.

Wachovia, with about $800 million in deposits, is the second-largest bank in the city, behind Columbus Bank and Trust Co. and its $3 billion in deposits.

Allmendinger said the 200 headcount in Columbus has held steady for the last couple of years and that he doesn't see it dropping despite the corporate cuts.

"We staff according to taking care of our customers and making sure that we have enough staff to support our customer base," he said. "That's growing, so we don't intend to reduce our staff."

Charlotte, N.C.-based Wachovia, the nation's fourth-largest bank by assets, reported Tuesday that it lost $8.86 billion, or $4.20 per share, in the second quarter period ending June 30. During the same three-month period a year ago, it turned a profit of $2.34 billion, or $1.22 per share.

Excluding $6.1 billion in write-downs to the value of its intangible assets and merger-related and restructuring charges of $128 million, Wachovia lost $2.67 billion, or $1.27 per share. Period results include the bank's October acquisition of A.G. Edwards Inc.

Wall Street analysts had been expecting a loss of 78 cents per share on revenue of almost $8.4 billion.

"These bottom-line results are disappointing and unacceptable," said Wachovia Chairman Lanty Smith. "While to some degree they reflect industry headwinds and weaker macroeconomic conditions, they also reflect performance for which we at Wachovia accept responsibility."

Wachovia spokeswoman Evelyn Mitchell said the company has not broken down any of the job cuts by region. She said those in Georgia will be "minimal."

The company began reducing mortgage staff in June and will slash its work force by 6,350 over the next year, she said. About 4,400 more open positions and contract employees will be eliminated as well. That will make the total employment cut 10,750.

Wachovia is planning a new branch in Columbus at 3201 Macon Road, on an outparcel in front of Cross Country Plaza shopping center. The bank bought a building permit from the city June 18, but there is no word on when construction will begin.

"We don't know when we're actually going to get started," Allmendinger said. "But there have been no mandates other than what (corporate) said earlier today about evaluating all capital projects that we have going on."

Though Columbus doesn't look to take the brunt of the mortgage fallout that led to Tuesday's announcement, Allmendinger said the local housing market remains tight.

"The mortgage environment in Columbus is still a challenging environment," he said. "You will continue to see a slowdown until we see some impact from the retail growth, Aflac expansion, Kia expansion, as well as (the Base Realignment and Closure expansion at Fort Benning). The mortgage industry will continue to be tough for the next couple of years."

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