A $93 billion Farm Credit System bank that employs 60 people in Wichita will pare its local ranks by two-thirds – through layoffs and relocations – over the next year and a half.
Denver-based CoBank said in a statement that as part of its “efficiency initiative,” it estimates it will eliminate about 20 positions in Wichita and relocate another 20 people to its headquarters in Colorado.
“Our presence in Wichita is critical to our success, and we remain committed to Wichita,” said a statement from CoBank that was e-mailed to The Eagle on Tuesday. “Remaining in Wichita for the long term will be personnel assigned to customer relationship management, credit, appraisals and minerals management.”
CoBank’s Wichita office manages a more than $6 billion loan portfolio.
CoBank spokesman Dan Haley said affected employees have been notified. He added the bank would not comment beyond the statement.
In 2011, CoBank merged with Wichita-based U.S. AgBank, which at the time employed 85 people in Wichita and six people in Sacramento, Calif. CoBank’s local operations are at the Farm Credit Bank building at 245 N. Waco.
The statement said the bank has been undertaking a bankwide evaluation of its operations to improve efficiency.
“We launched the assessment as part of a continual effort to be good stewards of corporate resources as well as in response to ongoing challenging conditions in the market, including a slow economy, slow loan growth, increased competition and the ongoing low-interest-rate environment.”
Earlier this month, the bank reported a 16 percent decrease in net income in the second quarter and a 13 percent decrease for the first half of the year. Its earnings for the quarter were $212 million, compared with $252.4 million in the second quarter of 2012. For the first half of 2013, earnings were $421 million, compared with $483 million in the same period a year ago.
CoBank said it is working to find jobs elsewhere in the bank for Wichita employees whose positions are being eliminated.
“We have been successful in placing some impacted employees in other open positions,” it said in the statement. “Any employees who are not placed elsewhere in the bank will be provided with enhanced severance benefits and career placement assistance.”
The Wichita jobs that are being transferred to Denver are primarily corporate functions, the bank said.
CoBank, which employs 860 people at its headquarters and 14 regional offices, said it is also cutting 20 positions in Denver.