CHARLOTTE, N.C. – Bank of America Corp. is cutting 3,500 jobs in the current quarter and working on a broader restructuring that could eliminate thousands of additional positions, The Wall Street Journal reported in its Friday edition, citing people familiar with the situation.
The 3,500 positions are spread across the nation's largest bank by assets, including investment banking and trading, and the cuts are expected to be completed by the end of September. Some employees already have been notified.
Thousands of additional reductions are expected as part of an aggressive overhaul known as "Project New BAC," after the Charlotte, N.C., bank's ticker symbol. Executives at the bank still are discussing the possible range of cuts, but one person familiar with the situation said at least 10,000 jobs are likely to be eliminated.
That would amount to 3.5 percent of the bank's work force.
A final decision about the number is not expected until early September, these people added.
The reductions come as many other financial firms also are pruning their work forces or cutting expenses elsewhere.
The company-wide retrenchment at Bank of America is part of a drastic turnaround effort by chief executive Brian Moynihan. He is trying to bolster profits amid swirling concerns about Bank of America's exposure to the slowing US economy and a slew of mortgage-related losses and lawsuits.
Moynihan's goal is to reduce expenses by as much as $1.5 billion per quarter, he told investors earlier this month on a conference call. Bank of America and other big banks are under relentless investor pressure to control expenses in order to offset weak revenue hurt by the sagging economy and new rules.
Bank of America's non-interest expense of $22.9 billion in the second quarter was up 32 percent from a year earlier. The figure includes employment, occupancy, marketing and other business costs.
"I know it is tough to have to manage through reductions," Moynihan said in a memo to top managers Thursday night, "but we owe it to our customers and our shareholders to remain competitive, efficient and manage our expenses carefully."
The 3,500 job cuts include hundreds of positions in its investment banking and trading unit. Cuts in that business are expected to amount to three percent to five percent of its employees. Last fall, the investment bank imposed job cuts of about three percent.
The elimination of thousands of additional positions will initially hit consumer banking and mortgage operations, as well as legal, marketing and human resources.