M&T To Cut 384 Hudson City Jobs Mostly In Paramus

M&T wants to trim costs 24% in takeover of Hudson City.

The Record ( — Saturday, February 16, 2013

The Record

M&T Bank Corp., which agreed in August to buy Hudson City Bancorp for $3.7 billion in stock and cash, said on Friday that it will eliminate 384 jobs, or about 23 percent of Hudson City's workforce.

Layoffs at Hudson City's administration and operations centers at West Century Road in Paramus were expected since the deal was announced. At that time, M&T, a commercial bank based in Buffalo, said it would trim Hudson City's costs by 24 percent, or $85 million annually.

How many jobs would be cut was answered on Friday by Richard S. Gold, an M&T executive vice president and one of 13 members of the its management committee, in response to questions from The Record.

The Hudson City deal will be the third-biggest purchase for M&T in the past five years, and significant cuts took place at the other acquired banks.

When M&T bought Delaware-based Wilmington Trust in 2011, the bank eliminated more than 700 of the 2,800 jobs. In 2009, M&T Bank sliced 521 jobs at Baltimore's Provident Bankshares, which it purchased for $401 million. The cuts represented 29 percent of Provident's workforce.

For Hudson City employees who are let go, jobs may be hard to find, at least in financial services, said James Hughes, dean of Rutgers University's Edward J. Bloustein School of Public Policy and Planning.

"It would be nice if the skills of the people who are laid off are useful to other industries. Overall, the financial sector in this state has been flat," he said.

The great majority of the cuts are in the 80 West Century Road headquarters and in "some of the annex buildings outside," Gold said.

Virtually all of the jobs being eliminated are back-office positions; and jobs that require interaction with customers in branch banks are being spared, Gold said.

"Back-office roles tend to be duplicative," he said, though he declined to be specific about job cuts by department. "On the mortgage side, we retained more than two-thirds of the mortgage origination department, and they will be trained to handle a broader array of business."

According to a Hudson City employee who asked not to be identified, the bank's mortgage servicing operation in Paramus, which he said employs about 90 people, will be closed. Gold declined to confirm that, but said "all of our servicing is done by and large in Buffalo and a little in Delaware."

Hudson CEO put on board

Hudson City Chief Executive Ronald Hermance will be on the M&T board but will not be involved in day-to-day management. Other top Hudson City managers will not be retained, Gold said.

What will become of Hudson City's offices on West Century Road is under evaluation, he said.

"We will maintain a regional hub in Bergen County, and we will have to work through the best way to do that," he said.

Paramus Mayor Richard LaBarbiera said he doesn't expect a long-term impact on tax revenue if M&T abandons one or more of Hudson City's Paramus properties.

"In Paramus, we have been blessed in that when one door closes another one will open. There are always turnovers."

The current annual property tax bills for 100 West Century and 80 West Century roads are $57,856 and $160,992, respectively, according to public records.

M&T, which has had a commercial-lending office in Saddle Brook for a number of years, has no retail bank branches in New Jersey but will have 97 after the merger is completed, as well as 38 in New York and Connecticut.

Gold said the deal is on track to close in the spring but said he could not be more specific.

Regulators and the shareholders of both companies must approve the deal.

"We don't underestimate the impact it has on affected employees," said Gold. "This is always the most difficult part of the journey."

Targeted employees, who were notified on Thursday of the cuts to begin in the spring, will be able to receive severance packages and extended health care benefits under a Hudson City severance plan, Gold said. They will also receive preferential status for job openings within M&T, he said.

At the same time it is cutting jobs, M&T is also hiring 175 people within the Hudson City footprint, in part to bolster commercial lending in the jumbo mortgage lenders' branches. Gold said 70 people had already been hired.

"They hired away one of my loan counselors," said Phyllis Salowe-Kaye, executive director of New Jersey Citizen Action. She has been in talks with M&T officials this week over statewide community reinvestment lending commitments.

Top Top | NJCA in the News | NJCA Homepage