By ROBIN SIDEL
Staff Reporter of THE WALL STREET JOURNAL
January 13, 2005; Page C1
NEW YORK -- Six months after taking over as president of J.P. Morgan Chase & Co., Jamie Dimon is sharpening his knife again.
From health-care costs to continuing-education to charitable donations, Mr. Dimon is digging deep into the bank in an effort to pare its spending habits. Some bankers are even worried that Mr. Dimon's frugal ways may hit their wallets later this month when the bank doles out bonuses for 2004.
Yesterday, J.P. Morgan, the nation's largest bank after Citigroup Inc., announced plans to shut a large credit-card facility in Tampa, Fla., by the end of the year. The move will result in 1,900 job cuts and is part of the 12,000 jobs that the bank is eliminating in connection with last year's $58 billion acquisition of Bank One Corp.
Intensive cutbacks are expected to continue through 2005, as Mr. Dimon, 48 years old, sits in the bank's No. 2 spot; he holds the titles of president and chief operating officer. Next year, the former chief executive officer of Bank One is scheduled to take the CEO job at J.P. Morgan from William Harrison, who will retain the title of chairman.
That is also when investors will be looking for the bank to grow. Indeed, J.P. Morgan executives say they are already assessing potential takeover targets in the U.S. and overseas, although no big deals are expected soon. Long known as a relentless cost-cutter, Mr. Dimon is using many of the same techniques he unleashed during his four-year stint at Bank One in Chicago and before that, when he was a top executive at Citigroup in the 1980s and 1990s. He refers to the process as "waste-cutting."
"Cost-cutting implies that you are chopping out something you really need," he said in an interview. Whatever it is called, it is a massive undertaking at J.P. Morgan, mainly because of the company's sheer size. The bank has approximately $1.1 trillion in assets and operates in more than 50 countries. It has a market value of nearly $140 billion and 175,000 employees. It had $1.4 billion in net income for the quarter ended Sept. 30, which was the first reporting period that included Bank One's results. Next week it will announce earnings for the final three months of 2004.
"We are moving at light-speed to get all this stuff done," Mr. Dimon said of the process. The bank originally said the Bank One deal would result in $2.2 billion in cost savings over three years, but has since raised that estimate to $3 billion. That includes an estimated $400 million in cost savings for 2004.
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