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BB&T's focus on lean means some job cuts
Most will be through attrition and retirement, it says
Journal File Photo
BB&T Corp. said that there will be no mass layoffs similar to what has happened at other companies.
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Published: January 16, 2009
An executive-level mandate to operate more leanly in 2009 is resulting in job cuts at BB&T Corp.
The bank would not say yesterday how many jobs would be eliminated in the cost-cutting initiative, which affects all operations, including those at its headquarters in Winston-Salem.
But it does expect that the majority would come through attrition and retirement rather than employees being let go, spokesman Bob Denham said. He added that there would be no mass layoff at BB&T similar to what some struggling financial-services companies have done in recent months.
"There is no doubt some positions will be eliminated through restructuring, and some won't be filled if an employee leaves," Denham said. "The process is ongoing, and the economy will dictate the extent of the reduction of the overall work force."
Analysts have said for months that BB&T has handled the credit crisis enveloping the financial-services industry better than most competitors from a profit and share-price perspective.
For example, BB&T's closing share price of $20.90 yesterday was higher than larger rivals Bank of America Corp. ($8.32), SunTrust Banks Inc. ($20.89) and Wells Fargo & Co. ($20.16).
It is, however, down 54 percent from its 52-week high of $45.31 on Sept. 19.
Analysts caution that BB&T remains vulnerable to further deterioration of the commercial and residential real-estate markets in North Carolina and Virginia, as those states' unemployment rates have surged in recent months.
"In addition, the current recessionary environment, marked by rising unemployment, will further impact BB&T's non-real estate related consumer-loan book, including its auto and credit-card portfolios," Moody's said Wednesday in a report in which its rating outlook for the bank was changed to negative from stable.
BB&T knows that it must operate more efficiently to not only weather the recession, but also to emerge in an opportunistic buying position in 2010, Denham said.
"We really are optimistic that we can get to the other side of the recession through these steps," he said.
Denham said that the cost-cutting effort began last fall with John Allison, its chairman and recently retired chief executive, and is being monitored by Kelly King, who became CEO Jan. 1.
"Managers across the organization have been challenged to find ways to make their operations run more efficiently in 2009," Denham said.
He said that many department budgets already have been amended multiple times.
"They have been asked to take a look at every item in their budget and delay any unnecessary projects," Denham said. "The only thing that should be on a manager's mind is how he or she can help BB&T navigate through the economy in 2009.
"We all have to find ways to be more efficient, or someone else is going to do it for us."
Denham said that BB&T will make "selective hires" to fill critical positions during 2009, but many of those will require a higher level of approval than previously.
"This is not the first time we've had to reduce staff where efficiencies made sense," Denham said.
The last major job cut at BB&T came in January 2007 when it eliminated about 700 positions, including 50 in the Triad. About 20 of those local employees were placed into other jobs.
At that time, BB&T had about 26,000 employees; now, it has about 30,100.
Denham said that BB&T continues to be active, having already loaned out $1.6 billion of the $3.1 billion it has received from the capital-purchase program of the Treasury Department.
"We're participating by the spirit of the program to help ease the credit crunch for consumers and businesses," Denham said.
■ Richard Craver can be reached at 727-7376 or at rcraver@wsjournal.com.
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