CHARLOTTE, N.C. — Bank of America Corp. has begun
eliminating 3,500 jobs companywide ahead of further cuts that are
expected to come this fall.
The reductions come as Bank of America chief
executive Brian Moynihan is working to cut expenses to boost
profitability and build capital as the Charlotte bank continues to
wrestle with mortgage-related losses. The bank’s shares are down nearly
50 percent this year.
In a memo to senior leaders on Thursday, Moynihan
said notifications to employees had begun. The 3,500 jobs — a little
more than 1 percent of the bank’s 287,000 jobs — are in addition to
2,500 jobs already cut this year, Moynihan said.
“We owe it to our customers and our shareholders to
remain competitive, efficient and manage our expenses carefully,”
Moynihan said.
The bank declined to provide a breakdown of the cuts
by city, but Charlotte, as a major employee hub, would be expected to
lose jobs in companywide layoffs. The bank has said it has about 15,000
workers in its headquarters city.
For months, Moynihan has been signaling plans to
reduce expenses, including launching an efficiency initiative this
spring called Project New BAC. The latest reductions are not part of
that project, but Moynihan said that work is “well under way.”
The management team will meet to review the plan in
early September and will begin disclosing plans after that. Bank of
America spokesman Scott Silvestri declined to comment on how many jobs
could be cut under that initiative. The Wall Street Journal reported
that it could be as many as 10,000.
The first part of the initiative covers the consumer
side of the bank. The latter portion will address capital markets,
commercial banking and wealth management businesses.
Bank of America’s last big round of job cuts came as
part of the 2009 Merrill Lynch acquisition. In that deal, the bank said
it planned to cut up to 30,000 positions.
Other banks have also been scaling back as they
struggle to generate revenue. Wells Fargo also has an efficiency
initiative under way.
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