Associated Bank to cut 225 jobs

0 Comments | La Crosse Tribune, Sep 16, 2004 | by Cahalan, Steve

About 225 First Federal Capital Bank jobs in support functions in the LaCrosse area are expected to be eliminated after Green Bay-based Associated Banc-Corp. acquires La Crosse-based First Federal Capital Corp., the companies announced Wednesday.

About 200 people will remain employed with the company in La Crosse in retail branch offices, consumer lending operations and the call center, the companies said. La Crosse will be the home of Associated's new Western Wisconsin Region, serving seven counties.

The vast majority of the reductions will occur in February, after the integration of First Federal into Associated.

This week, managers of both companies are telling employees whether the they will have a job after the acquisition.

The 225 jobs to be eliminated "probably is a higher number than we originally thought," said Dick Granchalek, president of the La Crosse Area Chamber of Commerce.

"It's going to take retraining and different occupations, I would think, for a number of people," he said.

Granchalek said the reductions will have some effect on the local economy. "You certainly will feel the impact on discretionary spending" by families of affected employees, he said. "People will tighten their belts and hold back on things that aren't absolutely essential for their family."

More than expected

"That's (the 225 figure) a little higher than we were thinking," said Jerry Hanoski, executive director of Workforce Connections Inc., which assists job-seekers and employers in an eight-county area. "The initial indications we had heard were about 150 initially, but followed by another 50 later on," he said.

"On the other hand, it's also being postponed a bit later than we thought," Hanoski said of layoffs. "We thought there would be some dislocations as early as next month."

Affected employees will be eligible for assistance from the agency's Dislocated Worker Program, once they are notified they will lose their job within 180 days, Hanoski said.

"It depends on a lot of factors," Hanoski said, when asked if affected employees will be able to find jobs elsewhere. "There certainly aren't 225 finance jobs in the area. But a lot of them are associated support jobs. We'll have to go in and survey the employees, and ascertain what their transferrable skills are with the area economy.

"The local economy is not really strong, but it's improving," Hanoski said. "It's better than it was six to eight months ago."

Mayor not surprised

Mayor John Medinger said he was not surprised by the 225 figure. "This is the number I've been hearing kicked around for the last few months," he said. "It's a significant number and cause for concern anytime 225 people lose their jobs."

La Crosse is a financial center, Medinger said. "My hope is a lot of these folks will find similar types of jobs," he said.

Medinger also said, "It seems like (Associated is) doing everything they can do to be fair and to soften the blow, which I appreciate, including assisting the employees with finding employment in the area and career counseling."

He said he thinks the pending acquisition is a "done deal" and he would be shocked if the acquisition did not occur.

Shareholders to vote

The companies announced April 28 they had reached agreement on the acquisition, and anticipated some job losses in the La Crosse area. Since then, the deal has been approved by bank regulators.

The last approval needed is from First Federal shareholders, who will vote Oct. 20.

Assuming First Federal shareholders approve it, the acquisition is expected to be completed sometime between Oct. 20 and Nov. 1, Paul Beideman, Associated president and chief executive officer, said in an interview. He was in La Crosse for Wednesday's announcement.

The companies will eliminate a total of about 425 positions after the acquisition, including the 225 jobs in La Crosse. The other job cuts will be primarily at First Federal operational centers in other locations in Wisconsin and Minnesota, and through attrition across the organization.

New jobs elsewhere

Beideman said those job cuts will be partly offset by creating about 130 new positions, primarily in Green Bay and Stevens Point, Wis. He said displaced First Federal employees will have preferential status when applying for those jobs.

Associated is committed to treating employees with openness, fairness and sensitivity, Beideman said.

"We're giving the lion's share of the people that are impacted here five months' notification," he said. "Ninety percent, roughly, of the displacements would occur when the systems come together, which is next February." A small number of jobs will be eliminated before that, he said.

Affected employees will receive severance benefits based on their length of service, and will have health insurance for three months after they leave. Associated said they also will receive outplacement services, including career counseling conducted at First Federal offices.

The companies said Wednesday their retail branch networks will not be significantly affected, and that every effort will be made to achieve any job reductions in the branches through attrition.