Between 650 and 700 employees are losing their jobs at former Park National branches now owned by U.S. Bank, Wednesday Journal learned today.
Three hundred of those workers are already gone, with another 350 to 400 being informed this week that they would no longer be employed with the bank, an officer with one of the Chicago-area branches said in a phone call today.
“It’s a bloodbath,” said the source, a senior officer who said he got his layoff notice Monday. He asked not to be named because he’s working for the bank until the end of March and is still awaiting details of his severance package.
“They get all that money from the government, and now they’re just pillaging Park National employees,” he said. The money reference is to $2.5 billion that the Federal Deposit Insurance Corp. sustained in the loss-share transaction through which it sold Park National and its sibling banks in the FBOP Corp. franchise to U.S. Bank.
On Oct. 30, federal regulators seized the nine banks in four states that Oak Park-based FBOP Corp. owned. After a bidding process that drew nationwide interest, the FDIC sold the banks as a package to Minneapolis-based U.S. Bank. According to a spokesman for U.S. Bank, the company had about 1,500 employees in its Chicago market before acquiring the FBOP banks.
In his testimony last week before a House subcommittee investigating the federal takeover of FBOP’s banks, River Forest resident Mike Kelly, the bank holding company’s sole owner, said FBOP employed 840 people in Illinois.
In what’s called a warn notice for the chief elected official of a community, U.S. Bank notified Oak Park Village President David Pope by Express Mail on Thursday that, as of the end of March, there will be “a mass layoff” at 28 Madison St. in Oak Park. That notice, however, accounted for 50 positions and only at one Park National building, a complex across the street from the bank’s main branch at Austin Boulevard and Madison Street that houses support staff.
According to the letter from U.S. Bank, those 50 layoffs are expected to be permanent. “There are no bumping rights at this location, and the affected employees … are not represented by any union,” the letter says. Pope could not be reached for comment today.
Steve Dale, senior vice president for media relations at U.S. Bank, said that all employees who interact with customers are expected to stay on during the transition. But duplicate positions that provide backroom support and administrative functions are being eliminated, as was expected when U.S. Bank first acquired FBOP Corp.’s banks.
“We’re trying to hang on to as many people as we can,” Dale said, “and we’re also trying to look for additional positions in the company for those who may be impacted.”
U.S. Bank typically does not disclose numbers of how many employees are being laid off, Dale said. Some employees, according to Dale, will be offered compensation packages for their service, depending on their years of service and other factors.
The cuts go far beyond back-office support, according to information Wednesday Journal has been gathering. Several people at former Park National offices have said cuts include upper management, loan officers, auditors, security personnel, and building and maintenance workers.
The senior officer who got his layoff notice on Monday said that U.S. Bank cut benefits for former FBOP employees as of Jan. 1, asking them to pay higher premiums for insurance plans with fewer benefits. He also said that certain employees in management positions are being asked to take 30 percent pay cuts because FBOP was paying its employees at above-market rates.
Five branches are reportedly closing in the Chicago area, including two locations in Naperville, one in Elmhurst and one in Crystal Lake.
Dale declined to comment on pay cuts or changes in benefits packages and could not provide specifics on which branches are closing. He said customers will be informed well in advance of their locations being consolidated with nearby locations.
Terry Finnegan, a former Park National employee who lives in Oak Park, said he, too, has heard about layoff being in the hundreds. Finnegan questions why U.S. Bank would cut compensation for some employees when FBOP had been paying those wages and making a profit for years.
“This was a profitable bank as it stood, based on employee levels and compensation provided by Mike Kelly to his employees,” Finnegan said of the former owner. “Why that needs to be drastically cut is a question I have.”
For more on this story, see the Feb. 3 print edition of Wednesday Journal, or check back at www.WednesdayJournalOnline.com for updates.