Wachovia Cuts Could Deal St. Louis Second Blow

Wachovia Corp. officials announced in a news release today that the company would cut dividends and jobs — 6,350 in all — after suffering nearly $9 billion in second-quarter losses tied primarily to the mortgage crisis. The news could result in a second economic body blow in a month hitting the St. Louis region.

Earlier this month, Anheuser-Busch board members voted to accept a $52 billion takeover bid from InBev, potentially putting at risk thousands of the brewer’s almost 6,000 St. Louis-area jobs. [Click here to read previous Bob McCarty Writes posts on A-B.]

As recently as February, officials with Wachovia Securities told the St. Louis Post-Dispatch that they expected to add 500 to 1,000 employees to its St. Louis-area during the next two years, boosting the company’s local workforce — primarily A.G. Edwards imports — to a total of 5,000 to 5,200.

While today’s news would appear to put the forecast above at risk, there is a glimmer of hope in the third paragraph of today’s news release: Revenue was driven by higher loans and deposits and strength in traditional banking fees, while strong fiduciary and asset management fees and brokerage commissions largely reflected the A.G. Edwards acquisition.

Keep an eye on this St. Louis.

-- Bob McCarty Writes