Dime to Cut 400 Jobs, 6% of Its Workforce, in Consolidation - TheStreet

Updated from 11:04 a.m. EDT

Dime Bancorp

(DME)

announced plans Friday to cut 400 jobs by the end of the year and consolidate some of its operations in an effort to trim annual expenses by $50 million.

The job cuts will affect about 6% of the company's 6,500 full-time employees. About three-quarters of the positions eliminated will occur at the company's banking subsidiary,

The Dime Savings Bank of New York

, with an emphasis on reducing management and staff support positions.

Dime Bancorp also plans to cut its securities portfolio in half, selling $2 billion worth of its investment securities. Officials said the sale should not affect stockholders' equity, but would result in a one-time pretax charge of about $87 million in the third quarter of the year. The company's cost reductions, which are expected to have a positive effect on earnings in 2001, will likely result in a pretax charge of about $38 million -- most of which will also be taken in the third quarter.

"Our cost reduction efforts are focused on improving earnings through operational efficiencies while protecting existing revenue and maintaining a solid base for continued growth," said Dime Chief Executive Officer Lawrence Toal in a statement.

The New York-based company remains the target of a six-month-long $1.97 billion hostile bid by

North Fork Bancorp

(NFB)

. In July, Dime Bancorp shareholders

rejected Dime's board nominees by a 2-to-1 margin after the Melville, N.Y.-based North Fork persuaded shareholders to withhold their votes for five board members up for election at this year's annual meeting.

North Fork's bid blocked Dime's proposed merger with

Hudson United Bancorp

of Mahwah, N.J, but Dime has repeatedly rejected North Fork's offer. In an attempt to stave off the takeover bid, Dime has since revealed plans to buy its shares back from investors. The cost-cutting measures announced Friday are also likely intended to restore shareholders' confidence and persuade them to reject North Fork's bid.

Dime Bancorp is the parent company of The Dime Savings Bank of New York, which operates 127 branches throughout the New York City metropolitan area. It also owns the

North American Mortgage Co.

Shares of Dime finished Friday regular trading up $1.69, or 8%, at $21.81, a 52-week high. North Fork Bancorp finished up 13 cents at $19.94.