Also: AmEx To Cut 5,400 Jobs; Accounting Firms Facing Thousands of Job Cuts as Banks Settle with Feds over Foreclosure Processing?; Boeing Consolidating in Texas; GT Advanced Tech Closing Solar Facility and more
Wells Fargo Bank reduced its total occupied square footage by more than 4.5 million square feet last year and promised to keep reducing space expenses.
“While we have made progress in improving our efficiency, we believe our expenses are still too high and we will continue to focus on opportunities to reduce expenses that do not impact our ability to grow revenue,” Timothy J. Sloan , senior executive vice president and CFO told analysts last week. "For example, since 2008, we’ve reduced the size of our overall real estate occupancy portfolio by over 16 million square feet net of growth. Over 4.5 million square feet of this reduction occurred in 2012."
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“We continue to see opportunities to reposition our real estate holdings in the next few years, and we are experiencing more than 20% higher efficiency in the construction of all new office projects using improved design and build-out standards,” he added.
Last year’s cuts amount to more than $500 million. Wells Fargo reported$7.62 billion in bank premises and fixed assets as of Sept. 30, 2012, compared to $8.1 billion a year earlier.
AmEx To Cut 5,400 Jobs
American Express plans to eliminate 5,400 jobs this year. The reductions will be partly offset by jobs the company expects to add during the year, the credit card company said. Overall staffing levels by year end 2013 are expected to be 4 to 6% less than the current total of 63,500.
Most of the cuts will come from the re-engineering of its global business travel unit, which has seen more and more customer volumes switch to online channels and automated servicing tools.
The job reductions will take place across seniority levels, businesses and staff groups. Overall, reductions will be spread proportionally between the U.S. and international markets and will primarily involve positions that do not directly generate revenue.
"For the next two years, our aim is to hold annual operating expense increases to less than 3%," said Kenneth I. Chenault, chairman and CEO. "The overall restructuring program will put us in a better position as we seek to deliver strong results for shareholders and to maintain marketing and promotion investments at about 9% of revenues.”
Accounting Firms Facing Thousands of Job Cuts as Banks Settle with Feds over Foreclosure Processing?
Last week’s $8.5 billion settlement by 10 national banks with the Federal Reserve Board regarding independent foreclosure reviews is already starting to result in more financial services layoffs across the country.
For starters, J.P. Morgan Chase is letting go four employees in at 111 E. Wisconsin Ave. in Milwaukee, with layoffs to occur by March 7. Thousands of more job cuts could follow.
Ten mortgage servicing companies, including JPMorgan, which were subject to enforcement actions for deficient practices in mortgage loan servicing and foreclosure processing, reached an agreement in principle last week with the Office of the Comptroller of the Currency (OCC) and the Federal Reserve Board to pay more than $8.5 billion in cash payments and other assistance to help borrowers. This agreement also includes Aurora, Bank of America, Citibank, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo.
Two more firms joined the settlement this week, Goldman Sachs and Morgan Stanley, agreeing to pay a combined $557 million more.
As a result of these agreements, the participating servicers will cease the independent foreclosure review, which involved case-by-case reviews of millions of loans. The detailed reviews for nearly a half of million borrowers whose homes were in foreclosure in 2009 and 2010 will never be completed.
Most of the servicers involved had retained thousands of independent consultants to conduct these independent foreclosure reviews, including accounting firms PwC, Ernst & Young and Deloitte. Many of those jobs will likely now go away.
Boeing Consolidating in Texas
Boeing will consolidate its El Paso, TX, facilities and reduce the workforce there by the end of 2014. The move is part of the company’s strategy to increase affordability for government customers and become more competitive in an increasingly global marketplace.
The 370 workers at the site manufacture electronics for a variety of Boeing products. Anticipated U.S. defense budget cuts likely will mean less demand for these items. Therefore, Boeing will reduce occupied square footage 50% by moving from three buildings into one, and will reduce employment by up to 160 positions.
GT Advanced Tech Closing Solar Facility
GT Advanced Technologies Inc. plans to cease operations at its Hazelwood, MO, facility. The idling of the Hazelwood Facility is part of the company’s effort to reduce costs and optimize its research and development activities.
The company conducts certain of its solar HiCz development at this facility and plans to transition this activity to its Merrimack, NH, facility. The idling of the Hazelwood facility will eliminate 35 jobs and is expected to be completed by March 31, 2013. The company estimates that the idling of the St. Louis facility will reduce its annualized expenses by $15 million, excluding restructuring charges.
Also, the company is scaling back its mergers and acquisition program in 2013. As such, the role of chief strategy and new business officer is being eliminated and David Gray, Ph.D. will be leaving the company this month.
Facility Closures & Downsizings
implemented a plan to close three of its sleep diagnostic and therapy facilities. The facilities are located in Oklahoma and Texas and are being closed because the revenue from these facilities has not met expectations and is not adequate to offset the fixed operating costs of these locations. The three facilities will be closed by the end of the month.
|Company||Address||City||State||Closure or Layoff||Layoffs||Impact Date|
|Homecomings Financial||1650 Corporate Circle, 1st and 2nd floors||Petaluma||CA||Closure||Unknown||Immediately|
|Digital Domain Institute||477 S. Rosemary Ave., Suites 321, 322, 323, 324, 326 & 328||West Palm Beach||FL||Closure||Unknown||Immediately|
|ETS-Lindgren||400 High Grove Blvd. ||Glendale Heights||IL||Closure||53||1/31/2013|
|Commerce Corp.||7603 Energy Parkway||Baltimore||MD||Closure||70||Immediately|
|The Carriage House Cos.||26 E. Talcott St.||Dunkirk||NY||Closure||133||4/5/2013|
|Teva Pharmaceuticals USA||223 Quaker Road||Pomona||NY||Closure||11||4/3/2013|
|Petri Baking Products||18 Main St.||Silver Creek||NY||Closure||228||Summer 2013|
|Zhongding Sealing Parts USA||310 Railroad Ave.||Strasburg||OH||Closure||65||3/31/2013|
|Sealy Mattress Co.||13635 N. Lombard||Portland||OR||Closure||106||3/4/2013|
|GenOn Energy||100 Main St.||Houston||TX||Closure||18||3/1/2013|
|Corelogic||84 NE Loop 410, Suite 410||San Antonio||TX||Closure||56||3/1/2013|
|Home Care Industries||350 Golden Eagle Drive||LaCrosse||VA||Closure||113||1/2/2013|
|Liberty Medical Supply||2157 Apperson Dr.||Salem||VA||Layoff||186||2/16/2013|
|SuperValu||7400 95th St.||Pleasant Prairie||WI||Closure||117||5/1/2013|
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