Bank of America could cut as many as 30,000 jobs

Charlotte ObserverSeptember 3, 2011 

As they work to complete the first phase of a major efficiency program, Bank of America Corp. executives are discussing plans that could slash the companywide workforce by as many as 25,000 to 30,000 jobs, sources familiar with the matter said.

The job losses could come over several years, the sources said. The Charlotte-based bank hasn't said how many jobs will be eliminated in the efficiency campaign, although some reports had previously said the number could reach 10,000. Executives are still working on final plans.

Broader cuts would be similar to London-based HSBC's plan to eliminate 30,000 jobs, or about 10 percent of its workforce. At the end of June, Bank of America employed about 288,000 workers, with about 15,000 in its headquarters city. A 30,000 reduction would equate to just over 10 percent of the employee base.

Bank of America has more employees than any large U.S. bank. The more profitable JPMorgan Chase has nearly 38,000 fewer workers.

"It's certainly going to be in the tens of thousands, and it's going to be at that level in other large banking institutions," said Dick Bove, a banking analyst at Rochdale Securities who follows Bank of America.

Bank of America chief executive Brian Moynihan, under pressure to improve profitability and build the bank's capital cushion, launched an effort in April called Project New BAC that aims to reduce costs and streamline the company.

Bank of America spokesman Larry Di Rita declined comment Friday on possible job cuts that could come from the initiative. Work continues on Project New BAC, he said.

In the first phase of the program, Bank of America executives are examining the consumer side of the bank, the mortgage business and staff functions. In the fourth quarter of this year and the first quarter of next year, they will tackle capital markets, wealth management and commercial banking operations.

In a memo to senior leaders last month, Moynihan said the management team will meet for a third and final review of "ideas for change" early this month. "We expect to begin communicating major outcomes and next steps soon thereafter," the memo said.

The project is designed to take grass-roots ideas from employees to reduce bureaucracy for workers and improve service to customers. At a time when it's difficult for banks to increase revenue, cutting costs boosts profits, allowing the bank to accumulate the capital it needs to absorb mortgage-related losses and meet new international standards.

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