DALLAS — This story was originally published in the Dallas Business Journal here.
Comerica Inc. laid off 250 employees in the fourth quarter and plans to close 26 branches as part of a multi-million dollar cost-cutting plan to control expense growth.
Executives of the Dallas-based financial giant disclosed the cuts during its fourth-quarter earnings call on Jan. 19. Overall, the bank tallied $25 million in severance charges related to the layoffs. A bank spokesman said the bank laid off 28 employees in Dallas-Fort Worth.
Chief Financial Officer Jim Herzog said Comerica (NYSE: CMA) is "streamlining" its management structure and eliminating "select roles" in order to "enhance colleague efficiency" and bring "key decision makers close to our customers." He described the cuts as "incremental actions to recalibrate expenses in support of investments and enhanced earnings."
"Through this process, we are prioritizing customers and positioning the business for future success," Herzog said.
Comerica eliminated more than 3% of its workforce with the job cuts. The company employed 7,667 people as of Sept. 30. Despite the layoffs, Comerica still increased its workforce in the fourth quarter with 7,701 employees as of Dec. 31.
The bank plans to close branches across Michigan, Texas, California and Arizona but did not disclose specific locations. Herzog said Comerica will close branches where it determines there will be "nominal customer impact." The bank has 408 branches as of Dec. 31, including 55 across DFW. None of the branches in DFW will be impacted, a spokesman for the bank said.
In addition to the layoffs and branch closures, Comerica also intends to optimize its product offering and renegotiate certain third-party contracts. Overall, Herzog said the cost-cutting actions will reduce expenses in 2024 by $45 million and by $55 million in 2025.
"These decisions are challenging and we do not take them lightly, but we feel they are necessary to support the sustainable growth of our business," Herzog said.
CEO Curt Farmer previously hinted in the fall that the bank would lay off employees as it deals with higher expenses and weaker earnings due to soaring interest rates. The bank is also not alone. Other financial giants like Goldman Sachs Group Inc., Charles Schwab Corp. and Citigroup Inc. laid off thousands of employees last year. Citigroup recently announced it will lay off 20,000 employees over the next two years.
"The whole industry has gone through an inflection in 2023 and somewhat of a recalibration," Farmer said during the Jan. 19 earnings call. "We've tried to be thoughtful in terms of balancing the things that we believe are driving revenue for us and will drive revenue for us going forward.
Layoffs across the U.S. surged last year with companies announcing 721,677 job cuts, a 98% increase from 2022, according to a report by Chicago-based outplacement firm Challenger, Gray & Christmas Inc. The total cuts were the most since 2020, when the Covid pandemic resulted in more than 2.3 million layoffs.
Not counting 2020, last year's job cuts were the most since 2009, when companies announced more than 1.2 million layoffs.
Despite the cuts, Farmer said Comerica will continue to invest capital in areas of growth like treasury management, payments, capital markets and wealth management. The bank will also continue its focus on small business and expansion into new markets in the Southeast and Colorado.
"We want to stay focused on those because we're trying to really play the long game here and try to get beyond sort of the immediate environment that we're operating in," Farmer said.
Comerica reported net income in the fourth quarter of $33 million, or 20 cents per share. For the full year, the bank's profit declined 23% from 2022 to $881 million, or $6.44 per share.
The bank ended 2023 with $85.8 billion in assets, $66.8 billion in deposits and $52.1 billion in loans.
Editor's note: This story has been updated with information from a Comerica spokesperson on layoffs in the Dallas-Fort Worth metro.
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