Buyout Blues Shortchanging Frazzled Bank Employees

Romulo Valencia is 35 years old and getting pimples like a schoolboy and high blood pressure like an old man. His hair is falling out and he feels sick. He worries a lot.

His “so-called career,” as he puts it, just isn’t turning out the way he planned.

Over the last six years, he has lost his bank job once and barely managed to hang on twice as corporate merger mania sweeps through the banking industry.

Every time he gets settled with one bank, a new one takes over and either lays him off or makes him reapply for his own job.

“It hasn’t gotten me anywhere,” Romulo said. “I haven’t moved up since ’92.”

At a furious pace, American industries are consolidating and downsizing to become more globally competitive and profitable. In no industry is it as rapid as banking, where the dollar value of mergers and acquisitions has more than tripled since a previous record was set in 1991.

In the process, employees are being laid off or bounced from company to company. Those who survive aren’t so much grateful as they are cynical and insecure, never knowing where the ax will fall next.

For workers who once thought they could stay with a company for a whole career if they got to work on time and did a good job, their worlds are in chaos.

Romulo’s future is so uncertain, he’s even afraid to have children.

“It’s like I don’t want to have kids if I have to go through sales [mergers] and things like that,” said Romulo, a stocky man with a neatly trimmed beard.

“How am I going to support my kid until he goes to college? There’s no money there,” he said. “I’d be worried because I don’t think I have a steady job.”

Merger mania is so pervasive, most of Romulo’s friends have gone through at least one. Some have lived through four mergers or acquisitions. Even Romulo’s girlfriend fears she will be one of 850 employees marked for layoffs when her employer, Mitsubishi Bank, merges with Bank of Tokyo to become the world’s largest bank.

“There is no such thing as job security anymore,” said Sherri Barfield-Bersonda, a colleague who worked with Romulo at Bankers Trust before First Bank Systems bought their corporate trust division. “It’s like starting all over again. If someone tells you this is a good, stable job, there’s no such thing.”

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Romulo knew he would face challenges when he fled the civil war in El Salvador with his mother and brother 15 years ago. But at age 20, he dreamed of one day having a steady job, a family and even buying a house.

He started working as a janitor while taking English classes at night. Then he went to a local business-training school and became a bank teller. He had temporary jobs as office assistants for six years before he got a permanent job at Bank of California--an entry-level job, to be sure, but he figured he was on his way.

That is, until 1989--when his hair started falling out.

His employer, the corporate trust division of Bank of California, was purchased by Bankers Trust. The new bank announced it would absorb all the old employees, but Romulo had a nagging suspicion it wouldn’t last long.

“You knew you were going to have a job eventually, but you didn’t know for how long,” he said. “It was a scare.”

Facing competition from other institutions providing lending services and burdened with overcapacity, banks are consolidating, cutting costs and getting rid of redundant employees. From the pre-recession late 1980s to the present, the number of U.S. banks has dropped by 4,000, from 14,000 to 10,000. There is some speculation that only 5,000 will be left by the turn of the century as banks continue to consolidate.

Through mid-December, 587 U.S. banks were targets of mergers and acquisitions. The amount paid for those banks reached nearly $70 billion through mid-December of 1995--a threefold increase from 1991--and 15.5% of the total value of U.S. mergers and acquisitions in 1995.

Ranking second is mergers and acquisitions involving radio and television broadcast stations, worth $54 billion--most notably Disney’s takeover of Capital Cities-ABC for $19 billion last summer.

In August, September and October of 1995 alone, 9,677 people were laid off because of mergers, making up 18.3% of total job cuts for that period, according to a study by Challenger, Gray & Christmas, a Chicago-based outplacement company.

Romulo’s been there, done that.

In 1992, his career stopped dead. And this time his blood pressure skyrocketed--a symptom, he knew, of another corporate purchase.

His employer, the corporate trust division of Bankers Trust, was sold to First Bank Systems and he was told to reapply for his job.

Although he had just been promoted by Bankers Trust, the new bank said they didn’t want him because he didn’t have enough experience in his new job. He was laid off with three months’ severance pay.

Going through an employment agency, Romulo got a temporary job as a data processor at Bank of America--a demotion.

“I tried to tell them I didn’t want to do that, but they said I didn’t have enough experience on my last position. That kind of ruined my goals,” he said.

He was eventually hired full time and promoted to administrative assistant--finally returning to the level he had attained two years earlier.

By the third time his department was acquired by another bank, just last November, Romulo had almost resigned himself to a life of uncertainty. But that hasn’t stopped his hair from thinning or his face from breaking out.

“When they announced the sale of this department, I thought, ‘Oh, no, not again!’ I felt comfortable where I am and I thought I was going to get somewhere here.”

But, looking on the bright side, he thought maybe this was his chance to ditch the banking business and try desktop publishing. If he didn’t do that, he knew how to work the employment agencies. This time, he said, “I’m going to put my foot down and say I don’t want anything less than what I’m doing.”

The new bank, First Bank Systems, was the same bank that laid him off three years ago. When they began accepting applications, Romulo didn’t apply. He figured he’d take the severance package, visit his relatives in El Salvador, then decide whether to change careers.

But five days before the buyout was official--on what Romulo thought was going to be his last day on the job--the new bank offered to retain him. Romulo begrudgingly took the job. He knew he should feel lucky to have it.

Now he’s busier than ever, doing some of the work that the two women across the aisle used to do before they were laid off, taking their family photos and potted plants with them.

Their empty desks are a grim reminder of what may come. It’s gotten to the point where Romulo no longer plans for the future.

“Oh boy, that’s something I don’t think much about because this buyout thing makes it hard to get settled. I’m busy thinking about now and not the future.”

Over the years, Romulo’s made a point of keeping in touch with his former co-workers because he never knows when he might need contacts to get a new job.

Every few months, they meet for happy hour at bars around San Francisco to catch up on their careers.

Invariably, Romulo says, one question is asked more than any other: “Where are you now?”