Perpetual Financial Corp., parent of the area's largest savings and loan, yesterday laid off more than 100 employees, temporarily discontinued its dividend payments and froze senior officers' salaries, all in an effort to reduce operating expenses.

The work-force reduction is the second announced by the Vienna, Va.-based holding company for Perpetual Savings Bank since June and is the latest in a series of reductions at area financial institutions, most of which are suffering from the declining real estate market and increased regulatory scrutiny.

John Morton III, chief executive officer, said the moves will save Perpetual more than $20 million during the next year, money that is desperately needed to shore up its ailing finances.

Morton said much of the anticipated savings will come from the previously announced elimination of Perpetual's corporate lending division and real estate investment activities, as well as from generally realigning management.

Perpetual is operating under a supervisory agreement with regulators and has announced a major restructuring to comply with last year's S&L rescue bill and avoid further deterioration of its loan portfolio.

Spokesman Robert A. Barton Jr. said the layoffs affected all levels at Perpetual, from senior managers to part-time employees. He said the cutbacks should not hurt customer service since most of them occurred in behind-the-scenes jobs.

Employees said they were notified of the layoffs by hand-delivered letters late yesterday afternoon and were told to clean out their desks by 5 p.m. They said they received severance pay equal to four weeks' salary plus a week's pay for each complete or partial year worked at Perpetual, up to a maximum of 16 weeks' pay. The company also is providing employees with placement counseling, Barton said.

"This wasn't really a surprise," said one senior vice president who was fired from Perpetual's operations center. "There'd been rumors for months."

The officer said that employee perks, such as special interest rates on Visa cards and mortgages, also were eliminated.

This latest round of cutbacks comes five months after Perpetual announced that it would eliminate about 200 unfilled positions from its payroll. Barton said more employees could be laid off in the future and some unprofitable branches could be shut down.

To help save money, Perpetual's board also decided to discontinue dividend payments on the company's 8.5 percent cumulative convertible preferred stock until the firm becomes profitable again. After losing $67.3 million on real estate loans in the first nine months of this year, Perpetual is in danger of failing to meet minimum federal requirements for capital -- cash thrift owners need as a cushion against bad loans.

Barton said the action will not affect the previously announced 22 cents-per-share preferred dividend payable at the end of this month.

"This is the prudent thing to do under the circumstances," Barton said. "It just gets to the point where dividends should be paid out of earnings and not capital. Our holders will understand that."