New Cutbacks at B of A May Eliminate 175 Jobs

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 an estimated 175 positions statewide.

Bank of America spokesman Ron Owens, while declining to specify how many jobs will be eliminated, said the cuts would 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 would not have to make severance payments.

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.

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, an 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%.

‘Right Direction’

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.

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

Separately, Duff & Phelps upgraded its ratings on the long-term and short-term securities of BankAmerica in response to the company’s financial performance in 1988 and high expectations for the current year. The ratings agency said the improved ratings reflected “significant improvement in operating profitability, continued progress in asset quality and further enhancement of the capital base.”