Am I Next? Layoffs at Fifth Third Bank



The oddly-named Cincinnati-based Fifth Third Bancorp has laid off an unspecified number of employees within its regional coverage. It appears that the personnel realignment is a routine part of the banks 2016 Project North Star long-term profit improvement plan that is based on both productivity improvements and cost reductions.  

Bank spokesperson, Larry Magnesen, said, “We look at staffing on an ongoing basis. We align our staffing levels with market demand and the operating environment. At any given time, there are areas of expansion where we are investing, usually to address our customers’ evolving needs. In other areas, our needs are lower, sometimes due to productivity improvements.  Clearly, staffing adjustments increase efficiency. That is a priority of the bank in order to invest in the capabilities we need to remain highly competitive in a rapidly evolving industry. Fifth Third is able to hold down the size of its layoffs by making regular adjustments to staff size and limiting staff additions in areas it might need to cut.”

Following the Republican Tax Plan, the bank adopted a $15 minimum wage for approximately 3,000 hourly workers and paid out $1000 bonuses to approximately 13,500 workers. It is unknown what effect that this may have had on ongoing operational costs or if the bank is simply cutting duplicate positions in preparation for the acquisition of Chicago's MB Financial in a $4.7 billion merger.  

It is expected that there will be many more layoffs during the integration phase of MB Financial.

By the way, the odd name comes from a 1908 merger between predecessor financial institutions, Third National Bank and Fifth National Bank. 

Are you asking yourself, Am I Next? 


 Am I Next? Mass Layoffs at CA Technologies



According to documents filed with the SEC (Securities and Exchange Commission), New York-based CA Technologies (formerly known as Computer Associates) has announced a restructuring plan that will result in approximately 800 layoffs and some office closures.



On May 2, 2018, the Company's Board of Directors approved a restructuring plan ("Fiscal 2019 Plan") to better align its business priorities. 

The Fiscal 2019 Plan comprises the termination of approximately 800 employees and facility exits and consolidations. These actions are intended to better align the Company's cost structure with the skills and resources required to more effectively pursue opportunities in the marketplace and execute the Company's long-term growth strategy, which includes a particular focus on shifting more of the Company's business to a subscription-based model. 

Actions under the Fiscal 2019 Plan are expected to be substantially completed by the end of fiscal 2019. Under the Fiscal 2019 Plan, the Company expects to incur a pre-tax charge between approximately $140 million and $160 million (including severance costs between approximately $90 million and $100 million and facility exit and consolidation costs between approximately $50 million and $60 million). 

Are you asking yourself, Am I Next?



 Am I Next? Layoffs at Devon Energy

Oklahoma City, Oklahoma-based Devon Energy Corporation has announced that it will be laying off approximately 300 employees company-wide in response to an industry-wide slowdown and relatively low oil and gas prices.

The Corporate Speak …

Dave Hager, Devon CEO: “Our changing industry requires us to make some difficult decisions, and this one is the most difficult. The main feedback we heard from those affected in the 2016 workforce reduction was that they appreciated being treated with respect, transparency and dignity. I assure you that this will be no different. Through the good times and the difficult times, we will live the Devon values.” 

Tony Vaughn, Devon COO: “Simply put, we have had too many people working on too many things — projects and otherwise — that are ancillary to our core business. In isolation, each of those projects adds value, but when taken as a whole, they are dilutive to our focus on the key value-creation activities of the company.”

John Porretto, Devon Spokesperson: “The oil and gas industry is in a lower-for-longer commodity price environment, which requires Devon to transform the way it operates The company must continue to sharpen its focus on core operations, increase its operating and financial efficiencies and align its workforce with this heightened focus to be as competitive and successful as possible in this environment."

These layoffs should come as no surprise to employees. Devon, in 2016, Devon publicly announced plans to reduce its workforce, cut-projects, and to lower operating costs in response to a low commodity price environment.  Additionally, previous announcements of Devon’s continued restructuring under their “Vision 2020” plan were announced in February 2018. Basically, the company will be concentrating on its core competencies and eliminating superfluous personnel, projects, and assets. According to published reports, there will be severe cutbacks in spending for IT infrastructure, travel, sponsorships and charitable donations, and independent contractors and consultants. 

And, in an effort to increase stock prices, the effort includes a billion-dollar stock repurchase and the pay-down of a billion dollars of accumulated debt.

According to Hager, “With our disciplined multi-year plan, Devon will accelerate value creation through the pursuit of capital-efficient cash-flow growth and portfolio simplification, not top-line production growth. Looking beyond our initial priority of reducing up to $1.5 billion of debt from our upstream business, we plan to return excess cash flow from operations or divestitures to shareholders through both opportunistic share buybacks and dividend growth.”

Are you asking yourself, Am I Next?