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Bank of America considers laying off 10 percent of workforce
By Catholic Online (NEWS CONSORTIUM)
September 11th, 2011
Catholic Online (www.catholic.org)
September 11th, 2011
Catholic Online (www.catholic.org)
Bank of America is considering cutting at least 10 percent of its work force as part of its restructuring. The Wall Street Journal reports that officials at the Charlotte, N.C., bank have discussed cutting 40,000 employees, or as much as 14 percent of the bank's 288,000 total staff.
LOS ANGELES, CA (Catholic Online) - Bank of America Executives met this week in Charlotte to make final decisions on the staff reductions. The bank has already cut at least 6,000 jobs this year as part of its reorganization.Chief Executive Officer Brian Moynihan unveiled the shake-up earlier this week in the bank's management ranks. He also announced that two key officers will leave and two others will be promoted to share the chief operating officer role.
"It's time to simplify the organization, streamline the organization and make sure our business processes are relevant when you have a smaller, more focused company," Moynihan told Bloomberg News this month. "We just don't need to be the biggest."
Moynihan is attempting to boost the bank's profits amid concerns about exposure to the slowing U.S. economy and a slew of mortgage-related losses and lawsuits. Bank of America is still struggling under the weight of bad mortgage loans, and says the moves are part of "delayering and simplifying" operations.
Since Bank of America has more employees than most of its major competitors and top executives have stressed the need to eliminate redundancies resulting from past acquisitions.
According to the Wall Street Journal, the bank recently sold $5 billion of preferred stock to Warren Buffett's Berkshire Hathaway. The bank is also trying to sell a large portion of its mortgage business, the newspaper said.
The majority of the job cuts are expected to be made on its consumer side, with the closure of 63 unprofitable branches between April and June. Bank of America says it also plans to close 750 of its nearly 6,000 locations in the next several years.
Bank of America Corp. started a cost cutting program called "New BAC" in the spring. Moynihan said Tuesday that the second phase of New BAC will begin next month and run through March.
The cost-cutting program is designed to make Bank of America simpler for investors and clients to understand, as well as easier for Moynihan and his deputies to manage.
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