Bank of America to Eliminate Up to 175 Positions Statewide

Bank of America said Tuesday that it has begun a new round of job cutbacks in its corporate banking department, a move that could eliminate up to 175 positions statewide.

Bank of America spokesman Ron Owens, while declining to specify how many jobs will be eliminated, said the cuts will come over the next several months through layoffs, attrition and “redeployment.”

One Bank of America corporate loan officer in San Diego, who asked not to be identified, said redeployment is a term being used to describe the practice of offering certain employees jobs the bank knows they will not accept, prompting them to quit. That way, the loan officer said, Bank of America can avoid making severance payments.

Transfer Offered

The officer, a four-year veteran of the bank, said he was offered a transfer Tuesday to a job at a Bank of America retail branch in a San Diego suburb but no severance package if he resigned. Even so, the officer said, he would resign.

Another San Diego employee, a 13-year veteran of the bank who also requested anonymity, said he was summarily laid off Tuesday and given a severance pay package. He said the elimination of his job and others was part of the bank’s effort to get rid of as many high-salaried employees as possible.

Owens said the job cuts reflect the bank’s efforts to “streamline our commercial banking activities” and to cut non-interest expenses, which are high compared to those of its counterparts in the banking industry.

Dan Williams, a bank analyst with Sutro & Co. in San Francisco, said non-interest expenses for the bank’s parent company, BankAmerica, were 70.8% of revenues in 1988, significantly higher than industry bellwether Wells Fargo’s 64.5% and Security Pacific’s 67.7%.

Job cuts are often the easiest way for a bank to reduce expenses, Williams said, and Bank of America has cut its work force sharply over the past three years.

The parent company’s employment at the end of 1988 stood at 53,700, down from 59,500 at the end of 1987 and from 78,067 at the end of 1985.

Williams said BankAmerica has also reduced jobs through the sale of assets, including the Charles Schwab discount stock brokerage unit.

BankAmerica’s assets as of Dec. 31 stood at $94.6 billion, up from $92.8 billion at the end of 1987, but down from $118.5 billion at the end of 1985.

“They have further to go, but they are moving in the right direction” in reducing expenses, Williams said.

Owens said it may take several weeks to determine how many jobs are cut in the corporate banking department because it may take that long for the employees offered transfers to decide whether to accept them. Owens declined to estimate the cost savings that the bank is anticipating from the job cuts.