Truist plans “sizable reductions in force” over the next six months and is simplifying its senior management team, appointing three leaders to head consumer, wholesale and insurance units, CEO Bill Rogers said at a conference Monday.
Having those three leaders compares with seven “heads” of different businesses when BB&T and SunTrust Banks merged in late 2019. The simplification will improve efficiency, add accountability, reduce risk and enhance revenue opportunities, according to a slide presentation.
The moves are part of an effort to save $750 million in gross costs over 12 to 18 months through a program now underway. The reduced staff will consolidate redundant functions and occur as “select business” is restructured, according to Charlotte-based Truist. The company employs about 53,000 workers, down by about 5,000 at the time of the merger.
Reductions in force will total about $300 million in savings, while organizational simplification will save $250 million and tech optimization, $200 million, the bank said. Truist in July started reorganizing its small- and mid-sized business lending operations, which involved changing job responsibilities, fewer regional presidents and some dismissals particularly in smaller cities, according to people familiar with the matter. The strategy includes an increased focus on digital-oriented banking products and services.
Rogers also emphasized “significant growth opportunities” enjoyed by Truist in its core businesses, including several potential revenue gains of more than $100 million in corporate and investment banking and commercial community banking.
Truist reported second-quarter profit in July that was lower than analysts’ estimates, partly because it set aside more reserves for potential loan losses if the economy weakens. Average deposits declined 5.7% from a year earlier as customers moved to higher yielding alternative investments.
The company is the sixth-largest U.S. bank with more than $550 billion in assets and offices in 17 states. Its stock has slumped since the 2019 merger amid a competitive banking environment. It pledged to reduce annual costs by $1.6 billion by 2022 at the time of the merger, and it has charged off more than $5 billion related to merger costs.
Truist is a major employer in Charlotte along with Winston-Salem and Atlanta, where BB&T and SunTrust had their headquarters, respectively. It also has a major presence in Richmond, Virginia.