At least 100 Harbor Community Bank employees will lose their jobs this year. This amounts to just over 20% of the company’s current workforce. The job cuts are expected to take place in stages, which are expected to be completed in the next five months.
Employees have already been notified whether they will be staying with the company or seeing a pink slip in the coming months. Individuals who have been informed of their jobs being cut will have the opportunity to apply for another job within the bank. Employees who will no longer be on the payroll will receive severance packages.
Why the Job Cuts Now?
The decision to cut jobs was not made by the senior managers of Harbor Community Bank; it was actually made by the upper management of Centerstate Bank Corp (NASDAQ:CSFL). This is the result of Centerstate acquiring Harbor Community Bank company outright.
The deal, which is expected to be finalized next month, will result in Centerstate Bank Corp becoming one of Florida’s largest community banks. This will result in jobs overlapping within the company, so some positions will no longer be needed.
Rather than having a large staff headcount and paying extra salaries, job cuts make the most sense for the business. This will make the company stronger as a larger entity and should help the overall margins of the business. Employee salaries make up the largest operating cost of the business.
Which Divisions Will Be Impacted From Job Cuts?
Harbor Community Bank currently has a total of 46 branches and three loan production offices.
Employees who face the greatest risk of being laid off are the ones who work in the loan production office. Employees from Harbor will join the current team at Centerstate, but not all employees will join the boarding process. The reason why this area is considered at high risk for job cuts is that Centerstate already has its own loan production offices.
In addition, the branch network will see a lower headcount. This will occur in areas that will end up having too much of a concentration of branches once the deal is closed. One example is in the Treasure Coast region of Florida, which currently is home to eight Harbor branches. It would make perfect sense to see a headcount reduction in the region because more than 17% of Harbor branches are located in this area.
There could be more job cuts ahead in other areas of the company after the acquisition is complete. The reason for this is that Centerstate and Harbor Community Bank are run differently by their senior management teams. As time passes, Centerstate will input their own business strategy at Harbor Community Bank, which could result in more job cuts in. This is because some things will look different on paper before the acquisition than they will in reality after the deal is officially closed.
“Harbor Community plans to lay off about 100 employees after CenterState Bank acquisition,” TCPALM, December 29,2017.
“CenterState Bank Corporation Completes Acquisitions to become one of Florida’s Largest Community Banks,” PR Newswire, January 2, 2018.