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Bank of America to axe 3,500 jobs, more cuts in store: WSJ

Bank of America to axe 3,500 jobs, more cuts in store: WSJ
PTI
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First Published: Fri, Aug 19 2011. 02 18 PM IST
Updated: Fri, Aug 19 2011. 02 18 PM IST
New York: Bank of America Corp will slash 3,500 jobs in the current quarter and is working on broader restructuring that could eliminate thousands of additional positions, a media report says.
Citing people familiar with the situation, the Wall Street Journal said the cuts are expected to be completed by the end of September and some employees already have been notified.
Thousands of additional reductions are expected as part of a broader restructuring exercise known as “Project New BAC” and the layoffs could touch at least 10,000 (3.5% of the bank’s present work force), the daily said, citing sources.
“A final decision about the number isn’t expected until early September,” WSJ said.
Bank of America chief executive Brian Moynihan is trying to bolster profits amid growing concerns about Bank of America’s exposure to the slowing US economy and a slew of mortgage-related losses and lawsuits.
“I know it is tough to have to manage through reductions,” Moynihan said in a memo to top managers on Thursday night, “but we owe it to our customers and our shareholders to remain competitive, efficient and manage our expenses carefully.”
Bank of America’s non-interest expense of $22.9 billion in the second quarter was up 32% vis-a-vis the year-ago period.
The figure includes employment, occupancy, marketing and other business costs, the daily said.
Bank of America shares are on a downslide and are down 47% so far this year, sinking to levels last seen in early 2009 as the financial crisis was raging.
Bank of America also expects to reduce expenses through a reduction in redundant systems inherited from prior acquisitions.
“Bank of America announced earlier this week the sale of its Canadian credit card portfolio to Toronto-Dominion Bank and the exit of its UK and Ireland credit card businesses. Bank of America also might sell private equity real estate assets to Blackstone Group LP,” WSJ said.
The reductions come even as other financial firms prune their work forces or cut expenses elsewhere. HSBC Holdings Plc plans to cut about 30,000 jobs worldwide by the end of 2013. Wells Fargo & Co has said it wants to trim its quarterly expenses by $1.5 billion.
Bank of America’s last big cutback came in 2008 with the announcement of plans for 30,000 to 35,000 job cuts over three years. The move was triggered by the economic downturn and the takeover of securities firm Merrill Lynch & Co.
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First Published: Fri, Aug 19 2011. 02 18 PM IST
More Topics: Bank of America | Jobs | Banks | WSJ | Economy |