Bank of America is considering eliminating 40,000 positions as a first wave of cuts to occur over a period of years, partly through attrition and hiring slowdowns. According to Dan Fitzpatrick’s Wall Street Journal article entitled “BofA Cutbacks May Hit 40,000,” the reductions are expected to come largely from the consumer side of the bank.
The proposed cuts are in addition to the 6,000 jobs already eliminated on the investment banking and trading side of the bank. BofA’s non-interest expense (which includes employment) was 32% higher than recorded in the second quarter of 2010, according to the article. CEO Brian Moynihan was quoted as saying, “I recognize this magnitude of change can be unsettling.”
Other Wall Street banks have announced job cuts as well. As of June 30, 2011, Bank of America employed 288,000, Wells Fargo 267,000, Citigroup 263,000, and JP Morgan Chase 250,000, according to the article. BofA recently terminated two of its top executives, the bank’s heads of consumer banking and global wealth and investment management, as part of a reorganization led by Mr. Moynihan.
But the cuts under consideration at Bank of America would go far beyond the cuts at other banks, and would also exceed the 30,000 to 35,000 of cuts over 3 years that was called for in 2008, according to the article.
In addition to the job cuts, Bank of America reportedly sold $5 billion of preferred stock. It has also and agreed to sell 50% of its ownership in a Chinese lender, and is trying to sell a significant portion of its mortgage business, according to the article.
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