Posted on 07/22/2008 4:25:28 PM PDT by Libloather
Charlotte bracing for Wachovia job cuts
06:29 PM EDT on Tuesday, July 22, 2008
By MARK BOONE / WCNC
E-mail Mark: MBoone@WCNC.com
CHARLOTTE, N.C. -- Mecklenburg County’s second-largest employer said Tuesday it would cut nearly 11,000 jobs as Wachovia announced a second quarter loss of $8.9 billion.
The bank employs more than 20,000 people, ranking just under Carolinas Healthcare System in number of workers, according to data from the Charlotte Chamber.
Many of Wachovia’s positions are expected to be trimmed from the company’s Charlotte offices, said Dr. Tony Plath, an associate professor of finance at UNC-Charlotte.
“Any way you look at it today is not a good day for the Charlotte labor market,” Plath said, adding that he anticipated as many as 4,000 of the layoffs to come from Wachovia’s operations in Mecklenburg County.
Analysts have said Wachovia is now an attractive takeover target for other financial institutions including J.P. Morgan Chase and Wells Fargo.
A merger could result in several thousand additional layoffs in Charlotte, Plath said.
**SNIP**
The bank’s neighbor on Tryon could offset some of the job losses, he said. Bank of America has indicated they will hire as many as 500 additional employees as the company expands some of its business units.
(Excerpt) Read more at wcnc.com ...
Just yesterday somebody was suggesting WB was a good buy, and today it is up 10%.
I heard on the radio they were planning to lay off 6500.
The new CEO is Gordon Gecko. Chop and sell.
I saw an article from the AP earlier in the day that had a similar number (6350, I think).
They are trying to actually come clean of all the bad crap that they have done. In the long runs it’s good for them.
It’s the other banks that keep drip by drip the bad news. At some point you gotta put it all on the table.
Wachovia would of saved itself a lot of problem if it wasn’t for Wachovia’s now defunct CEO Ken Thompson deciding Wachovia needed a presence in CA and purchased Golden West for $25 billion at the height of the real estate bubble. The problem is Golden West had a portfolio of $150 billion of Option ARMs with heavy exposure in CA. These loans as expected are going into the tank. Wachovia has ended the loan program and is pulling out all the stops to get these people into more normal loans. Looking back it might of been cheaper for Wachovia to build a presence in CA from scratch.
Its also being reported that they are getting out of the wholesale mortgage business entirely by the end of the week.
Good news for the company. The displaced workers will surely receive some assistance from the company. NC is a strong labor market so they will bounce back if they pull themselves up by their bootstraps.
The problem in banking is, and has been, the drastic swings between being a sales oriented culture and a credit oriented culture. They never seem to develop anything remotely resembling a balance.
When I worked for WaMu, and their sub-prime lending tanked, they proceeded to shut down loan production offices of all kinds all across the nation. The credit wing was allowed to list anything they considered “risky” and, as a former credit person, I can tell you the tendency among people who reach the top in credit is that just about everything is risky.
The end result was closing offices in low risk industries, in low risk markets that were performing well based on the decision by some credit person who had no involvement in the business that they just didn’t know enough about the market to do business there.
The funny thing is, at every large bank I worked for there were large losses taken. Some were through acquisitions. Others were single transactions. But the devastating losses were always on deals spearheaded and pushed through by the CEO. In some cases, they did serious arm twisting of the board for approval because the deals were just so risky. Yet in every case, it was staff in lines of business completely unrelated that seemed to take the real hit.
“They are trying to actually come clean of all the bad crap that they have done. In the long runs it’s good for them.
“It’s the other banks that keep drip by drip the bad news. At some point you gotta put it all on the table.
Writing off everything you can think of in one quarter is an old trick. Then, going forward, your earnings look good, and the market forgets about the big hit to your balance sheet that is still there. They might even get extra ‘earnings’ when losses turn out not to be worst-case, and they can cut back on the loss reserves.
Those poor people.
WHO? The employees - or those losing their shirts when the bank doors close?
I wouldn't be surprised of they're out of the banking business by the end of the week.
My business account is at Wachovia. My local branch is filled with nice people who have taken great care in being of assistance to me.
Are you suggesting Wachovia will cease to exist as a financial insitution by the close of business on Friday?
Source, please.
No, but it's got a better than even chance of following IndyMac into a Federal takeover.
That's assuming that a certain Democrat senator can keep his mouth shut this time, and the FDIC doesn't end up having to do that job.
You predicted this at least a week ago. Kramer ain’t got nothing on the rod!
Wachovia bought A.G. Edwards and Sons, Inc., a regional brokerage firm out of St.Louis a little over a year ago and I believe Edwards had close to 11,000 brokers.
Wachovia paid a premium for the brokerage firm, and the Wachovia Chairman/CEO responsible for this purchase is now gone. I’ll bet many of the former Edwards brokers are making plans to abandon the Wachovia ship as it lists in this stormy financial sea.
BANKING: FDIC chair says more banks are in danger of failing
IndyMac Bank's assets were seized by federal regulators July 11 after the mortgage lender succumbed to the pressures of tighter credit, tumbling home prices and rising foreclosures. The bank was the largest regulated thrift to fail, regulators said.
My best advice - get out - now. The good news? You're insured for $100 grand. Good luck.
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