SunTrust to Terminate 2,400 Jobs in Planned Overhaul

SunTrust, the 7th largest U.S. bank, announced that as part of a restructuring plan it will terminate 2,400 jobs, or 7.4% of its workforce, by the end of 2008. To cover the cost associated with the move, SunTrust will incur a pretax, one-time charge of $45 million in the September quarter. The restructuring plan, announced last year by CEO James Wells, should help the company save $530 million in annual gross cost savings by 2009. SunTrust spokesman Barry Koling reiterated that the move was "unrelated to the current mortgage industry woes, and reflects a process that's been in place since the beginning of the year." SunTrust also said it would continue to closely review its balance sheet, including what to do with its long-held stake in Coca-Cola. SunTrust sold 9% of its shares in Coca-Cola in the second quarter, providing after-tax profits of $150 million which the company said will be used to partially fund stock repurchases of $750 million to $1 billion. It will decide by the end of the year if it wants to sell the rest of its position. Shares are trading down $1.14 (-1.42%).

Sources: Press release, Bloomberg, Dow Jones, AP
Commentary: A Voice of Wisdom at SunTrust • SunTrust Banks Anyone?
Stocks/ETFs to watch: STI. Competitors: BAC, BBT, WB. ETFs: IAT, KBE, RKH
Earnings call transcript: SunTrust Banks Q2 2007

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