KeyCorp cuts 244 positions, more cuts planned as bank seeks increase profits

By: Marcos Lebron

BUFFALO, NY -- Twenty years ago, KeyCorp employed nearly 30,000 people. Now the number has dropped to less than half, to 13,359 and will be getting even smaller in 2016 and 2017

The recent announcement of Keybank and First Niagara pending merger will lead to further downsizing in staff mostly in the Buffalo and Western New York. Although, significant layoffs could happen in Massachusetts, Connecticut and Pennsylvania.

One analyst looks for Key to lose another 1,500 to 3,000 people in the next five years.

This news comes after the Cleveland-based bank, which employs 5,500 in Greater Cleveland, shed 244 positions companywide during the last quarter.

Chairman and CEO Beth Mooney said Thursday the bank has to start getting even leaner but needs to increase revenue too, saying, "You cannot shrink your way to prosperity."

Mooney said the bank doesn't have a target employment level in mind.

"We are managing it around projects, not people."

Cleveland's largest bank did enjoy a good quarter and year as profits were up slightly, at 1 percent, loan losses dropped in half and loan volume was up 7 percent from the third quarter, led by a nearly 21 percent increase in commercial and industrial loans. Customers are borrowing more as they get more confident, Mooney said, but mostly Key is taking marketshare from competitors. She noted that Key's loan growth is ahead of most competitors.

Another highlight for the quarter: Loan losses declined to less than a half-percent of loans, which is the lowest level in more than five years.

Profits were $203 million in the fourth quarter, up from $200 million in 2011. Per share, profits were 21 cents compared with 20 cents a year ago. For the year, profits were $836 million, up from $813 million.

Key spent $16 million in the fourth quarter related to its efficiency effort, including severance packages to laid-off employees. It's not known how many of the 244 eliminated positions stemmed from resignations or were already vacant. Those severance payments will ratchet up this year as the bank peels off more jobs by eliminating redundancy, combining some jobs and outsourcing some tasks so it doesn't have to employ people full time for workloads that may fluctuate.

Key last July said it planned a new effort to cut expenses, pare back some of its nearly 1,100 branches and increase revenue.

Key actually gained employees in 2012 in part because of its acquisition of 37 HSBC branches in New York. But employment is down by 3,000 people in the last five years, and by 7,000 in the last 10 years.

Panorama Hispano is the regional news and information newspaper for Hispanic and other diverse communities.

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