Article

2011-09-14 Economy

[Al Jazeera] Bank of America is to cut 30,000 jobs over the next few years in a bid to save $5bn a year. The cost-cutting drive is part of a broader effort to reshape and shrink the US' largest bank as it copes with fallout from the housing bust.
Thanks Mr. Dodd, Mr. Frank...
The cuts came on the day Barack Osama, the US President sent his $447bn jobs bill to Congress to help reduce the level of unemployment.

The bank said it expects many of the cuts to come through attrition and eliminating unfilled positions through the cost-cutting programme called Project New BAC, named after the code for its shares on the stock market.

The bank announced the job cuts in a statement shortly after Brian Moynihan, the bank's chief executive, disclosed the cost-saving goals in an address to investors saying "We're a much simpler company than we were 24 months ago".

The Bank of America's stock had lost half its value this year, largely over problems related to poorly-written mortgages it acquired with its 2008 purchase of Countrywide Financial Corporation.
Oh yeah, that...
Currently the bank is facing lawsuits from investors and regulators over the sales of mortgage-backed securities that lost value after the housing boom collapsed.

The latest job cuts will lead to a 10 per cent reduction in the bank's work force of 288,000. The cuts come on top of 6,000 positions the bank has already eliminated through the third quarter of this year.

The shares initially rose, then fell back again amid disappointment at the lack of detail given about the cost-cutting plans. Late in the session they recovered to close up by 1.3 per cent at $7.05

The shares had lost about half their value in 2011 as fears grew that the bank may have to issue more shares to meet new global capital requirements.

There was a brief recovery in August when it was announced that billionaire investor Warren Buffett had invested $5bn in the bank, but the shares have now fallen below the levels before that investment was made.

Posted by Fred 2011-09-14 00:00|| || Front Page|| [11132 views ] Top

#1 Yokay, I'll bite, I know for a fact CNN said 40,000???

Posted by JosephMendiola 2011-09-14 00:27|| 2011-09-14 00:27|| Front Page Top

#2 The internet has fundamentally changed banking.

The pre-GFC boom masked the fact that there are far too many bank retail outlets.

Apart from my mortgage, I do all my banking with a bank that doesn't have any retail outlets (branches).

Posted by phil_b 2011-09-14 01:32|| 2011-09-14 01:32|| Front Page Top

#3 Perhaps the others are retiring to spend more time with their families, JosephM. Or possibly CNN was operating on incomplete information...or Al Jazeera is. The BoA website will have the correct number, no doubt.

Posted by trailing wife 2011-09-14 01:35|| 2011-09-14 01:35|| Front Page Top

#4 Unexpectedly.

Posted by g(r)omgoru 2011-09-14 02:27|| 2011-09-14 02:27|| Front Page Top

#5 I agree with phil_b. About 6 months ago I dumped Chase for banking services with a company that has no retail branches. I saved myself a lot of money and now receive much better service.

Posted by Scooter McGruder 2011-09-14 02:32|| 2011-09-14 02:32|| Front Page Top

#6 I've started going with a full-service investment broker. Banks are a lost cause thanks to the Federal Gov't.

Posted by Besoeker 2011-09-14 07:41|| 2011-09-14 07:41|| Front Page Top

#7 I still smell something rotten with this acquisition of BofA by Buffett. There has to be some government cheese in it somewhere.

That guy is an idiot.

Posted by newc 2011-09-14 14:44|| 2011-09-14 14:44|| Front Page Top

#8 Didn't Bernanke and Paulson kind of just shove Countrywide and Merill Lynch down BofA's throat? That was certainly the impression I got. So if there's any justice, which I doubt, most of the jobs being cut will come from those acquisitions.

Posted by Ebbang Uluque6305 2011-09-14 16:15|| 2011-09-14 16:15|| Front Page Top

#9 Ebbang is correct.
Many if not most of the cuts will come from countrywide, whose ex-CEO is in jail and could not be reached for comment.

Meanwhile Wells Fargo is laying off 12% of its workers thanks to Wachovia's contribution to the mortgage bubble. (shotgun marriage: 1 sick bank + 1 healthy bank = 1 really big sick bank)

Al

Posted by Frozen Al 2011-09-14 17:29|| 2011-09-14 17:29|| Front Page Top

07:43 Procopius2k
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