As part of its final steps to improve the company's competitiveness,


(KEY) - Get KeyCorp (KEY) Report

today announced that it will cut its workforce by 2,300 over the next 15 months and will repurchase $25 million worth of shares.

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Although the banking company expects annual savings of about $360 million from the overall initiative, it said it will take charges totaling $198 million in the third quarter, mainly to cover severance pay and the costs of closing facilities.

Key said it will reinvest $60 million of savings to fund activities that will enhance its competitive position, fuel higher growth and improve customer service. The company expects these changes to result in a pretax earnings improvement of 43 cents a share by 2002. That's well above the previously expected 24-cent improvement announced in November 1999 after the company began the first phase of this revamping.