U.S. Bank is laying off at least 261 people in Illinois, 50 of them from Park National Bank in Oak Park, according to an announcement by U.S. Bank on Friday.
“It’s a bloodbath,” an officer at one former Park National branch told the paper. He asked not to be named because, after getting his layoff notice last week, he’s working for U.S. Bank until the end of March and is 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 in a phone call. 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 had seized FBOP’s nine banks in four states after the Oak Park-based company missed a deadline to recapitalize. According to a spokesman for U.S. Bank, the company had about 1,500 employees in its Chicago market before acquiring FBOP’s banks. Those banks employed 840 people in Illinois, according to FBOP’s chairman Mike Kelly.
In what’s called a WARN notice (see sidebar) sent to the chief elected official of a community, U.S. Bank last week notified David Pope, president of the Village of Oak Park, that, as of the end of March, there will be “a mass layoff” at Park National’s Madison and Austin location. That notice accounted for 50 positions at the bank’s complex across the street from the Austin and Madison main branch 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.
U.S. Bank also sent a WARN notice to the state Friday, announcing plans to layoff 261 people at four different facilities in Illinois, according to the state’s department of commerce. Those cuts will start in March and include the 50 in Oak Park, according to commerce department spokeswoman Marcelyn Love. A branch in Oakbrook Terrace and two in Chicago are also affected by those job cuts.
Reached Monday, Pope, who fought to prevent the takeover and is part of a grassroots effort demanding its reversal, was direct.
“The Park National takeover was a clear waste of two and a half billion dollars in federal money, and now, with these layoffs, we see the human cost of that decision, as well,” Pope said.
The village president plans to speak with representatives of U.S. Bank sometime this week to clarify the financial institution’s future role in the community. He hopes the new bank’s level of charity to Oak Park and surrounding communities will be somewhere near that of Park National, which had set a community standard for philanthropy.
“It would seem reasonable to expect that U.S. Bank will dedicate some part of that incredible good fortune to investments in the communities once served by Park National Bank and, in particular, those economically challenged neighborhoods that have historically been forgotten and left behind by so many of the larger banks in our country,” Pope said, referring to Chicago’s West Side.
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 will be offered compensation packages for their service, depending on their years of service and other factors. He also said that U.S. Bank was giving notices for positions, and not people.
Sources 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 last week 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 added that certain employees in management positions are being asked to take pay cuts because FBOP was paying its employees at above-market rates.
Five former Park National branches are being consolidated with U.S. Bank branches, according to Dale – three in Naperville, one in Crystal Lake and another in Elmhurst. In addition, two U.S. Bank branches will be consolidated into former Park National branches – in Irving Park and Geneva.
Dale anticipates those mergers to happen closer to the summer. He said customers will be informed well in advance of their banks being consolidated with nearby locations. But he declined to comment on pay cuts or changes in benefits packages, as well as on the layoff figure of 600 given by a source, citing U.S. Bank policies. Dale, though, said he doesn’t anticipate that the company will send out any other WARN notices in the Chicago area.