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Monday, August 17, 2009

Sovereign down 517 jobs in PA, even with no-layoff deal

UPDATED: Sovereign Bancorp has cut its Pennsylvania staff to 2,710, from 3,227 at the beginning of the year, confirmed spokesman Andrew Gully, when I asked him.

Cuts aren't just at the Boston bank's former Wyomissing and Philadelphia headquarters. It's "across the business lines," says Gully, spokesman for Sovereign, which is owned by Spain's Banco Santander. Nationally, Sovereign has slipped from 12,000 to just under 10,000 workers in eight states.

So 517 jobs gone in PA, some of them after the January 30 deal between the bank and dissident shareholder-employees. That deal says "Santander will not terminate and will not to permit Sovereign to terminate, except, in either case, for cause, the employment of any Sovereign employees employed by Sovereign in the Commonwealth of Pennsylvania" until next year. (Read it here. See point 2-d on Page 5).
 
"People can take voluntary departures," Gully pointed out. "We'd like to reduce jobs. They get an enhanced severance package if they left."

How enhanced? Workers whose layoffs were announced before the settlement get severance pay based on time served. Others got "a year's worth of salary," plus severance, Donovan & Searles LLP partner Michael Donovan, who represented shareholders and employees vs. Sovereign, told me. Workers could stay a year, then leave. Or they could leave now, get a year's pay for staying home, and have that time to find another job, earning two incomes. Tough choice! Donovan says Sovereign's cuts conform with "both the spirit, and the letter," of the deal.

Sovereign, once the biggest bank based in eastern Pennsylvania, was bought by Santander for pennies on the dollar after rebel investors forced out longtime chief executive Jay S. Sidhu and ran the giant savings bank into the ditch. Sidhu now runs New Century Bank of Phoenixville, where he's in expansion mode, raising capital and hiring Sovereign veterans.

Sovereign is "finished" cutting, Sovereign's Gully told me. "Pennsylvania is still an important market for us. We'll be hiring."
Posted by Joseph N. DiStefano @ 12:34 PM  Permalink | 1 comment
Comments   
  • 0 like this / 0 don't   •   Posted 6:01 PM, 08/17/2009
    Seems to be the "new" 4th greatest lie ever told after "I love you", "the check is in the mail", and I won't @#@%&$ in your mouth. Is it any wonder why people do NOT trust big business and the last paragraph was the best- we will be hiring - lol. Then why lay off? keep your employee base and retrain them if need be instead of casting them to the jobless line. AQ pity.
    — marshalld


1 comments
About Joseph N. DiStefano
Joseph N. DiStefano writes this blog to feed his PhillyDeals column in the Philadelphia Inquirer. Joe has been a member of Bloomberg LP’s New York Finance Team, wrote the book “Comcasted,” taught writing at St. Joseph’s University, and studied economics and history at Penn. Reach Joe at 215-854-5194 and JoeD@phillynews.com
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