BALTIMORE -- Residents of this traditionally blue-collar city were accustomed to bearing the brunt of recessions. The port, the steel mills and the auto plants of Baltimore were hit hard by the economic slowdowns of the mid-1970s and the early 1980s. Layoffs were a way of life. Residents endured them and waited for things to get better.

But this recession seems different. For one, it involves pillars of Baltimore's economic and civic life that never before have known this kind of financial pain.

MNC Financial Inc., parent of the largest bank in Maryland, the 58-year-old Maryland National Bank, is facing serious financial difficulties and has laid off 400 workers. And 95-year-old insurer USF&G Corp., whose headquarters rise above the Baltimore skyline, earlier this month announced that it was laying off 350 people immediately, with more cuts expected.

"Maryland National Bank is a symbol in this community. When an institution of that prominence has the problems it is having, it casts a big shadow," said Decatur H. Miller, chairman of the law firm Piper & Marbury. "Then you combine that with USF&G. ... When two members of the first tier are having difficulties, it has an effect in every way you can imagine on the whole business community. It is demoralizing."

Among those losing their positions at the city's two financial giants were their chief executives, Jack Moseley of USF&G and Alan P. Hoblitzell Jr. at MNC. Going too is Donald B. Hebb Jr., president of the city's 190-year-old brokerage house, Alex. Brown & Co., whose decision to leave the helm and assume other duties followed the poor performance of some of the stocks the company had underwritten.

"You couldn't have predicted a year ago that the three of them, who had been touted as the leading CEOs in town, would be ousted from their positions," said Eric Garland, former editor of Warfield's, a Maryland business magazine. "That is a sign that the city has been through an upheaval in trying to manage in a difficult economy."

The recession comes at a time that should have been sweet for Baltimore. In recent years, the city of smokestacks and row houses has successfully made the transition away from an industrial base toward a service-oriented economy. Development of the Inner Harbor brought a flood of convention and tourist business. Prestigious educational institutions spurred biomedical and other high-technology industries. Health-care and the professions also blossomed.

Now, even some of those businesses are starting to slack off, and the numbers tell of an ailing economy. The regional unemployment rate has risen 2 percentage points in the last 12 months, to 5.6 percent in November, while retail sales have fallen and the number of people working has shrunk.

Defense Secretary Richard B. Cheney's decision to cancel the Navy contract for the A-12 bomber could cost as many as 1,200 jobs at the sprawling Westinghouse Electronic Systems Group complex near Baltimore-Washington International Airport. Two weeks ago, Epstein's, the city's last independent department store, said it was closing its seven branches.

The recession has followed Mary Sollon, 34, like a shadow. She and her husband, James, were forced to close the downtown dry-cleaning operation they had owned for 15 years when business fell off sharply. She then went to work for Pappagallo's shoe store in the Harborplace complex, and a month later, the franchise that owned the store filed for protection under federal bankruptcy laws. "We used to make so much money {with the dry-cleaning business}, and then, nothing," she said. "When it's food or clothes, people fill their stomachs first."

To some extent, Baltimore's economy is sheltered by its increased diversity. Gone are the days when a recession would send the port, the giant Bethlehem Steel mill at Sparrows Point and the General Motors plant into a tailspin and drag the city with it.

Spice maker McCormick & Co. Inc., for example, reported a 38 percent increase in profits over the previous year. Sales at Noxell Corp., a Procter & Gamble Co. cosmetics subsidiary, are reported up 6 percent. The Rouse Co.'s Harborplace and nearby Gallery shopping center are up 2 percent or 3 percent over last year, a smaller increase than in past years but still an increase. Overall, the Baltimore unemployment rate is slightly lower than the national average.

"If you compare it to what happened in the Southwest {in the mid-1980s} or the Northeast ... I think you can look at the region as having strong growth characteristics," said Rouse Co. Chairman Mathias J. DeVito.

Still, the convention and tourism business, which pushed the number of downtown hotel rooms from 1,500 in 1980 to over 5,000 in 1990, is off. Especially in the last few months, more convention attendees are canceling at the last minute, and companies in general are sending fewer people to staff their exhibits in the convention center, according to Matt Miller, associate director of the Baltimore Area Convention and Visitors Association.

Partly for that reason, merchants and hotels a few blocks or more from the waterfront are experiencing difficulty. Some hotels, including the Omni, the Lord Baltimore and -- further from the harbor -- the venerable Belvedere, have filed for bankruptcy protection or been sold. The turmoil has raised questions in some minds about how much of a renaissance downtown Baltimore really has achieved.

"The idea of getting critical mass is working in the harbor," said Warfield's ex-editor Garland, "but the waters don't lap up much beyond a block or two past the harbor."