For Additional Information:
Ed L. Hutchins, 336-732-4200
[email protected]
August 28, 2000
For Release: Immediately
Wachovia Announces Resource Realignment As Part Of Performance Project
Wachovia Corporation (NYSE: WB) is eliminating approximately 1,800
positions as part of a continuing performance project designed to lift pre-tax
earnings by $425 million by 2002.
The performance project, initiated in 1999, seeks to accomplish earnings
improvement through revenue enhancement, productivity gains, sharper capital
deployment and expense management.
"The resource realignment announced today is another step in a thoughtful
process that will make Wachovia stronger and more competitive," said L. M. Baker
Jr., chairman and chief executive officer. "In order to compete effectively,
Wachovia must continue to build performance. We must continue to take decisive
actions, even when those are difficult."
The positions to be eliminated were identified through a productivity
review focused on improving work processes, introducing new technology,
broadening spans of control, eliminating levels of management and instilling an
entrepreneurial spirit throughout the company. The job reductions will be spread
throughout the organization and all levels of professional staff are affected.
To ease the effect on displaced employees, Wachovia has enhanced severance
policies and career transition benefits.
The staff reductions will reduce expenses by $100 million over time. The
company will take a pre-tax restructuring charge of $85 million to $100 million,
primarily to cover severance costs related to the positions being eliminated. A
substantial portion of the charge will be taken in the third quarter. Wachovia
currently has 21,300 employees.
"In today's economic environment companies must constantly reshape lines of
business for strong performance," said Baker. "Discipline is necessary to ensure
that time, energy and resources are targeted to the highest opportunities for
growth and to provide high levels of service to customers."
Wachovia Corporation, with dual headquarters in Atlanta and Winston-Salem,
N.C., is a leading financial holding company serving regional, national and
international markets. At June 30, 2000, Wachovia had assets of $70.8 billion.
Member companies offer consumer and commercial banking, asset and wealth
management, bank card, capital markets and investment banking, brokerage and
insurance services. Wachovia Bank, N.A., the principal subsidiary, has nearly
700 offices and 1,400 ATMs in Florida, Georgia, North Carolina, South Carolina
and Virginia. Wachovia's highly rated Web site is located at www.wachovia.com.
This news release contains forward-looking statements regarding Wachovia
Corporation. All forward-looking statements involve risk and uncertainty and
actual results could differ materially from the anticipated results or other
expectations expressed in the forward-looking statements. A discussion of
factors that could cause actual results to differ materially from those
expressed in the forward-looking statements is included in Wachovia's filings
with the Securities and Exchange Commission, including the Current Report on
Form 8-K, dated August 28, 2000.
