Bank of America Corp. said Thursday it expects to cut 30,000 to 35,000 jobs
over the next three years, as it faces a deteriorating economic environment and
tries to absorb Merrill Lynch & Co.
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The final number could be even higher, analysts say. Charlotte, N.C.-based Bank
of America said it hasn't yet completed its analysis for eliminating positions,
and won't until early next year. The company and Merrill have about 308,000
employees in total, and the cuts will affect workers from both companies and
all types of businesses.
Bank of America is considered one of the country's healthier banks, and its
decision to slash so many jobs illustrates the breadth of the layoffs hitting
the United States. The nation lost more than half a million jobs in November
alone, and economists expect many more to come.
Bank of America's action is a particularly hard blow for Charlotte -- which is
also home to the beleaguered Wachovia Corp., a once strong bank that is now
being acquired by Wells Fargo & Co. in what amounts to a fire sale. Just three
months ago, when the Merrill Lynch deal was announced, Charlotte was dubbed
Wall Street South; now, the banking center is being hit as hard as Wall Street
and other towns across America, where people go to work in the morning unsure
if they will still have a job that night.
Thursday's announcement of job cuts at Bank of America was hardly unexpected,
considering the merger and the wave of job losses seen in the banking industry
and in other sectors over the past few months. Bank of America and Merrill
Lynch have already eliminated thousands of investment banking jobs over the
past year, as have other banks, in an effort to lower costs as they face
increasing defaults in mortgages, credit card debt and other loans.
With no end in sight yet to the economy's troubles, Bank of America might have
to slash even more jobs as loan losses mount, said Alois Pirker, a senior
analyst at Boston-based research firm Aite Group. If the company's earnings
worsen from this year to next, "I think that might lead to more reductions."
Other big banks -- which have all received loans from the government's bailout
fund -- have been cutting jobs as well.
New York-based Citigroup Inc. has been slashing jobs the most. By next year,
Citigroup expects to have shrunk its work force by 75,000, or 20 percent, since
its headcount peaked in late 2007.
JPMorgan Chase & Co. is shedding about 7,000 employees, or 10 percent, of its
investment bank staff, and cutting 9,200 jobs at Washington Mutual Inc., the
bank it acquired in September. Goldman Sachs Group Inc. and Morgan Stanley,
meanwhile, are reducing their staffs by about 10 percent.
The massive layoffs have raised questions about executive pay: With so many
people losing their jobs, should the companies' executives still receive
lucrative packages? CEOs at Citigroup Inc., JPMorgan Chase & Co. and Bank of
America Corp. have yet to reveal whether they will receive bonuses this year,
but those at Merrill, Morgan Stanley and Goldman have announced that they will
forgo them.
Some argue, though, that the shotgun deal between Bank of America and Merrill,
valued at $50 billion when it was initially announced in September, may have
saved jobs in the end. It was struck as the solvency of investment banks was in
grave doubt, and kept Merrill from a complete meltdown like the one suffered by
Lehman Brothers Holdings Inc., which was forced to file for bankruptcy.
Shareholders of both companies voted to approve the deal last week and it is
expected to close by Jan. 1.
Bank of America shares fell $1.78, or 11 percent, to close at $14.91 on
Thursday, while Merrill shares fell $1.43, or 10 percent, to $12.67.
In after-hours trading, Bank of America shares rose 12 cents to $15.03, and
Merrill shares rose a penny to $12.68.
AP Business Writers Sara Lepro in New York and Ieva Augstums in Charlotte,
N.C., contributed to this report.
http://finance.yahoo.com/news/BofA-plans-up-to-35000-job-apf-13812950.html
I keep six honest serving-men (They taught me all I knew); Their names are
What, Why, When, How, Where and Who.
-- Rudyard Kipling
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