Bank of America speeds up branch closures, 16,000 job cuts
By the end of the year, Bank of America Corp. hopes to get rid of 16,000 jobs, close 200 branches and shrink its mortgage operation, according to a document sent to top management.
The institution is accelerating its cost-cutting strategy, planning to pare its operations so much that it will lose its spot as the nation’s largest bank employer, falling behind the likes of JP Morgan Chase, Wells Fargo and Citigroup.
The proposed slashes would bring Bank of America’s workforce down to 260,000 by year-end, according to the document, which was summarized for the Wall Street Journal.
Chief Executive Brian Moynihan, in his attempts to make the company more focused and profitable after its disastrous 2008 takeover of mortgage giant Countrywide Financial Corp., is aiming to trim the employee count by 30,000 to save some $5 billion in its first round of cuts.
Through the end of the second quarter, that means a 23% downgrade in the number of junior investment bankers compared to September 2011, according to the document. In the consumer banking department, 5,300 workers will go; 3,200 employees overseeing new mortgages will be cut.
The unit handling troubled loans had 55,000 workers by mid-2012, but will be reduced to 50,000 later this year, according to the document. The number of employees in the global wealth and investment management sector will stay steady.
Bank of America shut down 178 branches last year and will close an additional 200 this year, according to the document.
The bank has already slimmed down enough, partly by dropping high-risk loans, to report a profitable second quarter in July. Profit beat Wall Street expectations at $2.5 billion, or 19 cents a share, though revenue shrank to $22 billion.
In midday trading in New York, the stock was down 1%, or 10 cents, to $9.19 a share. Earlier, it had stumbled as low as $9.05.
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