Bank Of America Job Cuts
September 13, 2011 by staff
The bank cut about 30,000 jobs in an effort to restore investor confidence and in turn a negative wave that has grown after the recession and amid slower economic growth.
Cutting jobs is the largest decrease in employment by a U.S. company this year; the most since the U.S. Postal Service said last year that wanted to eliminate another 30,000 jobs. Earlier this year, Merck & Co. said it will cut 13,000 jobs, and Bank of America is the largest since General Motors cut 47,000 jobs in 2009.
Bank of America is trying to reduce costs as the mortgage unit of Countrywide continues to suffer great losses.
The cuts fall in line with the massive job cuts in financial firms in the U.S. and abroad. However, as this year’s 50 largest banks worldwide announced nearly 60,000 job cuts, the fastest pace since the recession-plagued 2008. As the U.S. economy Western Europe and stagnates, banks have cut costs to become or remain profitable.
Bank of America said that the elimination of 30,000 jobs would help the company cut $ 5 million and annual expenditures for the year 2014.
“As the company implements the decisions of thousands of new draft BAC at the time,” said Bank of America said in a statement, “aims to become a more centered, more agile and more efficient, providing all clients and customers with the best financial services, generating strong revenues, the careful management of costs and risks and delivering long term value for shareholders. ”
The company has already announced 6,000 jobs cuts earlier this year, but the latest move is an effort to reduce significantly the bank, which employs 288,000 workers by June 30. The company’s shares have been beaten this year amid struggles of their mortgage units and concern about the need to raise more capital in the global economic crisis, losing 47 percent in 2011.
On Monday, Bank of America shares rose seven cents on news of layoffs, and 7.05. 52-week low of Bank of America and 6.01, but the company’s shares have tumbled this year, below the yearly high of 15.31 y.
The reduction is part of the first phase of the bank of a cost reduction program – “New Project BAC” – the company expects will ultimately result in the full and $ 5 million in annual savings. The company issued a statement on the cuts “new BAC” work plan Monday at the 2011 Conference Global Financial Services Barclays Capital in New York.
“It’s time to simplify the organization, streamline the organization and ensure that our business processes are relevant when you have a small company, more focused. Just do not have to be the biggest,” said the CEO of Bank of America, Brian Moynihan in a September 6 interview.
Bank of America said its goal is not a “certain number” of job cuts, but rather the implementation of the new decision BAC. The company said decisions are made; levels of employment in some regions under study are expected to fall.
Bank of America acquired Countrywide at the time the federal government was involved in the TARP bailout of many financial firms.
Among the recent initiatives by Bank of America were taking over and 5 billion investments from Warren Buffett, the sale of half the company’s investment in China Construction Bank and 8.3 billion, and the expulsion of consumers Sallie Krawcheck bank head.
At a meeting in New York on Monday withanlysts, Moynihan not close the door to other drastic measures, including a declaration of bankruptcy of Countrywide, the Bank has cost tens of billions in U.S. losses. When asked if he would consider putting the bankruptcy of Countrywide Moynihan said: “We looked at all our options.”
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