Bank of America could cut 40,000 jobs
Officials at Bank of America have considered cutting as many as 40,000 jobs during a company overhaul known as "Project New BAC."
The Wall Street Journal reports that Bank of America CEO Brian Moynihan is expected to discuss the first part of the plan on Monday.
The numbers aren't final and could change. The restructuring would reduce the bank's work force over a period of years. In fact, Mr. Moynihan may not discuss a job-cut number during next week's presentation at the Barclays Capital 2011 Global Financial Services Conference in New York.
Project New BAC, which refers to the bank's stock ticker symbol, is part of the nation's largest bank's push to get leaner and more profitable. Moynihan has pledged to cut quarterly expenses by up to $1.5 billion. The bank has already eliminated 6,000 positions this year, and also agreed to sell half its stake in China Construction Bank. In late August, it was announced that Warren Buffett had agreed to invest $5 billion in the bank,
The latest workforce reduction plans could take three years to implement, The Wall Street Journal reports. Officials had discussed cutting as many at 50,000 jobs at one point, but the number was later pared down. Bank of America employed 288,000 workers as of June 30.
Executives met Thursday and Friday to finalize the plan. Some of the jobs could be cut through attrition and hiring slowdowns, and most of the cuts are expected to come from the consumer half of the bank. The bank also plans to close 750 of its roughly 5,700 branches over the next few years.
“I know it is tough to have to manage through reductions," Moynihan wrote in the memo to bank leadership in August. “But we owe it to our customers and our shareholders to remain competitive, efficient and manage our expenses carefully.”
In June, Bank of America agreed to pay $8.5 billion to investors including Pimco, BlackRock and the Federal Reserve Bank of New York to settle claims on mortgage-backed securities. Since then, insurance giant American International Group has filed a lawsuit against Bank of America.