HolyCoast: BofA Cutting 2,000 High Paying Senior Banking Jobs

Wednesday, May 02, 2012

BofA Cutting 2,000 High Paying Senior Banking Jobs

These people will not have an easy time replacing their paychecks:
Occupy Wall Street protests are the least of Bank of America's problems. The bank is starting to lay off its more profitable employees.

On Tuesday, the Wall Street Journal reported that Bank of America, the nation's second largest bank by assets, plans to lay off 2,000 staffers in investment banking, commercial banking and foreign wealth management. The layoffs are significant, the WSJ writes, because: "of whom they target: the high-earning employees whose efforts helped Merrill Lynch account for the bulk of Bank of America's profit since the financial crisis."

The planned layoffs come after the bank's announcement last fall that it would cut 30,000 jobs: mostly less well-paid positions in consumer banking.

The layoffs are meant to signal that Bank of America will slash its expenses enough to bring them in line enough with lower revenue, according to the WSJ. Bank of America has seen its revenue plunge 22 percent between 2009 and 2011 (while total employee pay rose 17 percent) due in part to fewer mergers and acquisitions as economic growth stays sluggish and new financial regulations prevent more lucrative risk-taking. The bank's expensive acquisition of Countrywide also left it saddled with toxic mortgages, according to the WSJ.

Bank of America needs to reassure its investors any way it can. Its stock price has plunged 54 percent over the past two years, according to Google Finance.
This is yet another sign that the economy is far from recovering, but is poise for another downturn.

1 comment:

Larry said...

"Kelly McMillian, operations director of the McMillian companies – which makes rifles, ammunition, gunstocks and related firearms equipment – said a bank vice president explained at a meeting last week that he no longer wanted McMillan's business because the companies manufacture firearms."

McMillan is just the latest gun company to get kicked to the curb by BofA -at a time when the gun business is one of the brightest spots in this dark economy. If they'd rather push a political agenda instead of doing business, then they deserve to go broke.