U.S. Bank aims to cut costs 5%: Worker pay may be hit if budget trims fall short
(Milwaukee Journal Sentinel, The Via Acquire Media NewsEdge) Feb. 10--Some U.S. Bank employees could face reductions in pay or hours this month as the bank tries to trim expenses 5% amid the recession and a difficult environment for financial institutions.
Steve Dale, spokesman for the Minneapolis-based bank, said Monday the company doesn't want to lose its employees, so it has asked its line-of-business divisions companywide to find ways to cut budgets by 5%. In some cases, where reductions in travel, seminars, office supplies and other costs can't reach the 5% mandate, it will come by paring back employee pay, he said.
"We are trying to have as minimal an impact on people as possible," Dale said Monday. "I know any time you reduce people's pay or reduce their hours, that's not looked at as minimal. But we're not looking at a significant reduction-in-staff program. That's not what this is."
U.S. Bank, formerly Milwaukee's Firstar Corp., has about 5,000 employees in Wisconsin and approximately 3,300 in the metro Milwaukee area, Dale said.
Although U.S. Bank has remained profitable, its earnings were down about 32% in 2008 to almost $3 billion. Many analysts predict a hard year for banks as unemployment rises and consumers and businesses are less able to pay back loans.
Dale said he couldn't predict exactly how the 5% expense cut would affect Wisconsin, where the bank has 114 branches.
"We're trying to protect our most important asset, and that's people," Dale said. "That's what we're trying to do. We're trying to do this in a fair manner that doesn't impact people's employment status."
That might mean someone's hours get cut from 40 to 38, "or a number that's workable," to help get to the overall 5% reduction for the division, Dale said. But cuts for full-time employees will not be so big that they affect health insurance and other benefits, he said.
Asked whether the pay reductions would start with top executives, Dale responded: "Sure would. Starts all the way at the top. All employees are going through this process. No one in the organization is immune to the impact of the 5%."
Dale said U.S. Bank -- with $262 billion in assets the sixth-largest commercial bank in the nation -- has prepared over the years for how it would cut expenses by 5% if needed.
"We've got good people and we want to keep them, and we're trying to," Dale said.
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