KeyCorp to Cut 2,300 More Jobs, Saving $360 Million Annually - TheStreet

Updated from 10:46 a.m. EDT

KeyCorp

(KEY) - Get Report

said Thursday that it planned to eliminate an additional 2,300 jobs as part of a cost-cutting campaign expected to save the Cleveland-based bank $360 million annually when it is fully implemented at the end of 2002.

The company has already cut more than 700 from its workforce nationwide. The additional jobs will be eliminated by the end of next year.

By consolidating its facilities and business lines, reducing its workforce, and outsourcing some of its activities, KeyCorp said it expects to boost earnings by 43 cents per share by 2002 -- nearly double the anticipated 24 cents per share projected when the

initiative was launched in November. The company also plans to repurchase 25 million shares of its common stock.

KeyCorp said it has already saved $100 million by streamlining its operations, about $60 million of which will be reinvested in activities "that will enhance the company's strategic competitive position."

In a statement, KeyCorp Chief Executive Officer Robert Gillespie said the bank expects earnings will grow more than 10% in 2001 and in 2002, assuming there is no significant economic slowdown. He projects earnings per share of $2.55 to $2.65 in the next fiscal year. In addition, he said the company aims to increase revenue by 6% to 8% annually over the next two years.

"Our intent is to manage the company and our businesses as simply, seamlessly and efficiently as possible," said KeyCorp Chief Operating Officer Henry Meyer in a statement.

Shares of KeyCorp have steadily risen since early March, when they slipped to a 52-week low of $15.56. This month, the stock

jumped into the mid-$20s in anticipation of Thursday's announcement.

KeyCorp closed Thursday regular trading down 13 cents at $23.19.