Post-Merger B of A Job Cuts Are 60% Deeper Than Planned

Bank of America has laid off at least 60% more employees than it originally anticipated when completing its 1998 merger with NationsBank, but California did not bear the brunt of those additional job losses, officials said Friday.

The Charlotte, N.C., bank said it has slashed about 12,600 positions nationwide since September 1998, when the $37-billion merger was completed, according to documents filed with the Securities and Exchange Commission.

At the time of the merger, the bank anticipated it would cut 5,000 to 8,000 jobs.

Executives attributed the additional layoffs to several factors, including the sale or consolidation of certain business units, slower-than-expected attrition of existing employees and improvements in technology, which permitted the bank to eliminate jobs.

“The initial projection was conservative,” said Peter Magnani, a spokesman for B of A.

The bank has not disclosed how many of the layoffs occurred in California, but about 1,800 positions were cut in the Bay Area, mostly at the bank’s former headquarters in San Francisco.

Analysts said it is common for layoffs to be greater than originally expected, but they warned about cutting too deep.

Wells Fargo Bank, for instance, predicted it would cut 7,500 jobs after its 1996 purchase of First Interstate Corp. But in a rush to reduce expenses, about 13,000 jobs were lost. That contributed to long lines at branches, technological foul-ups and misplaced deposits. Angry customers abandoned the San Francisco bank, which lost billions in deposits.

“It’s not uncommon in large bank consolidations for additional efficiencies to be realized through the loss of more employees,” said Ed Carpenter, a Irvine bank consultant.

“But what banks want to watch out for is cutting into their core level of customer service,” he said. “Banks often find that the most efficient operation may not be the best service operation, and customers can be unhappy as a result.”

B of A executives said Friday that its California units have lost a smaller share of jobs than those in other states. That’s partly because of the state’s tightening labor market and the lack of branch overlap between the two banks in California.

“California was substantially less affected than the company as a whole,” Magnani said.

As of December, the bank had 38,300 full-time employees in California, down about by 8%, or 3,320 positions, from the date of the merger. The figures include both layoffs and normal attrition.

Nationwide, the total number of full-time jobs fell by nearly 11%, or nearly 19,000 positions.

Most of the lost positions were in administrative departments as the banks consolidated their accounting, human resources and other back-office functions.

Separately, B of A disclosed this week that its chairman and chief executive, Hugh McColl, was paid $76 million last year, mostly in stock. That makes McColl the nation’s highest-paid banker.

The payout consisted of $1.25 million in salary, a $2.5-million bonus, $44.7 million in stock and $27.2 million in stock options.

Times staff writer Edmund Sanders can be reached at edmund.sanders@latimes.com.