Bank of America layoffs

Bank of America layoffs
Bank of America layoffs. Reports that Bank of America Corp. (NYSE: BAC) is planning to eliminate as many as 40,000 or more jobs is likely to hit the recession-plagued state of California especially hard.The Golden State, which is already reeling under a 12 percent unemployment rate, has 45,000 BofA employees – representing about one-sixth of the company’s total workforce. The Wall Street Journal first reported the huge job cull this past week, but did not provide many specific details. Brian Moynihan, BofA's chief executive, is expected to disclose details of the massive layoffs at an investor conference in New York on Monday.

According to a report in the Los Angeles Times, the bulk of layoffs are expected to come from the bank’s consumer-banking operations, which will probably slash hundreds of jobs at retail branches, loan centers and other offices throughout California.

The bank, which was once based in San Francisco but is now headquartered in Charlotte, North Carolina, is also planning to shut down 10 percent of its branches across the country.

California has about 956 BofA branches, the largest concentration of any state, the Times reported.

Esmael Adibi, an economist at Chapman University in Orange, Calif., told the paper: "We don't need to lose any jobs in this environment, whether in financial services or anywhere else,.”

Christopher Whalen, a bank analyst at Institutional Risk Analytics, told the Times that bank customers in California will likely face longer lines an reduced services at BofA.

"You're definitely going to see decreased service levels for consumers," he said. "They're talking about either closing branches or reducing the head count in the branches."

BAC shares declined more than 3 percent on Friday, coinciding with a weakness across the banking/financial services sector. The stock has lost almost 50 percent of its value year-to-date.

Moynihan is under enormous pressure to cut costs in order to improve profitability. The bank posted a record $8.8-billion in the most recent quarter.

The bank has made some dramatic other steps lately, including snapping up uber-investor Warren Buffet as a stockholder and firing prominent executive Sallie Krawcheck.

Source: ibtimes