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Great Western Employees Can't Bank on Jobs

Downsizing: Round of layoffs after merger with Washington Mutual has caused worker morale to plummet.


CHATSWORTH — To the outsider, the million-square-foot headquarters of Great Western Financial Corp. here it seems like a pleasant place to work, with modern buildings, tranquil green spaces, a day-care center and bronze statues in the cafeteria.

But for those on the inside, the scene is far from serene.

As the first wave of layoffs from the merger of Great Western and Washington Mutual sweeps the bank's corporate headquarters, employees describe a tense and insecure workplace as they wait anxiously for the next ax to fall.

When the two financial service companies combined on July 1 to form the nation's largest thrift with $90 billion in assets, the company announced that 100 overlapping branch offices would close in California and analysts predicted that hundreds, perhaps thousands of jobs would be lost.

The home office of Great Western was first to be pruned by Washington Mutual, and by the end of July the first cycle of pink slips were issued to 220 executives with a ranking of senior vice president or above.

Now, workers say, the company has postponed further layoff notification three times, and angst is running high.

Rumors rumble through hallways, restrooms and parking structures that 2,000 workers--out of a pre-merger total of 3,000--will be terminated before the banks' consolidation is completed next spring.

Remaining employees say they aren't so much relieved to keep their jobs as worried, never knowing whether they will be the next to go.

Others have been told they will indeed lose their jobs, but not when. Left in limbo, they say they can't plan their lives or make commitments to other employers.

In the bank's 30-person treasury department, stress has reportedly caused health problems among some employees.

"A lot of people are talking postal worker syndrome here," said a department employee who asked for anonymity. "People are tense and afraid someone will go off," he said.

The merger almost tripled Washington Mutual's customer base--from 1.4 million to 4.1 million households--and the bank will need extra workers to accommodate a larger client base, said Washington Mutual spokesperson Libby Hutchinson.

At the same time, duplicated services--and staff--will be eliminated. A corporation can't have competing headquarters or CEOs, she said.

"There will be more elimination of jobs," said Tim McGarry, Great Western's spokesman, who would not quantify the extent of future layoffs or when they would happen.

Washington Mutual is in the process of sorting through job descriptions and will gradually phase out redundant positions, he said. There are no plans to close the Chatsworth campus, he added.

"All along it was made clear by top management that the merger process would not be painless, that there would be layoffs. I don't think there are any surprises here," he said.

McGarry said the mood was mixed at the company, with many employees staying on to work for Washington Mutual and others "looking forward to starting new phases in their careers."

"This is a friendly merger, remember, not a hostile situation," McGarry said.

But several workers painted a less than amicable portrait of the post-merger situation.

"I've never seen anything this bad. Morale is worse than it's ever been," said a man who works in real estate lending. "They've told us basically that our jobs will be eliminated but they haven't given us any dates.

"There's no purpose to what I'm doing because it's being duplicated by a department at Washington Mutual--there's no reason for me to be here," said the employee who, like other workers, agreed to be interviewed on the condition that his identity not be disclosed.

"It's like a machine that has gone off a cliff but is still cranking out a product; it's all pointless busywork," said another employee who works in loan coordination.

Three other workers in real estate lending, each of whom had worked at Great Western for more than 12 years, said they were resentful about assuming the tasks of their dismissed colleagues.

"We've had a lot of people from within our department leave, but they're still expecting the work to happen," said one woman. Often, working under deadline pressure, she'd call up a key source in another section only to hear the phone ring incessantly.

Others said they were going "stir-crazy" because their jobs' functions had been eliminated, their projects canceled, and they literally sat around for eight hours waiting for news of their fate.

"I used to come in at 7 a.m. every morning, leave at 5:30 p.m. and eat at my desk," said a mid-level manager in the treasury department. "Now I come in at 9 and leave at noon; all the senior vice presidents are gone so people come and go as they please. There's nothing to do and there's no bosses around to make you do it."

"It's a very stressful environment, people are demotivated," said a vice president who was given a pink slip earlier this summer. "Most people want out. They simply want their packages and out."

Several months before the merger, Great Western set up a severance package of six to 18 months pay for its employees. To receive the package, workers must show "satisfactory" performance until their termination date, said Washington Mutual spokeswoman Hutchinson.

But the job market for downsized bankers is also shrinking.

The number of FDIC banks in the United States fell 33% from 14,199 at the end of 1986 to 9,528 a decade later.

"The whole industry is restructuring," said J. Kimball Dietrich, a professor of finance and business economics at USC. As technology and mergers trim jobs, bankers may be forced to look outside traditional institutions and pursue work as consultants, accountants or security and investment analysts, Dietrich said.

But for those employees caught in Great Western's corporate make-over, getting out of bed each morning for a job that may soon expire is sheer drudgery.

"If they'd just let me go, I'd be able to get on with my life," said one worker.

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