Bank of America is considering cutting at least 10 percent of its work force as part of a massive restructuring, according to published reports.
The Wall Street Journal said that officials at the Charlotte, N.C., bank have discussed cutting 40,000 employees, or 14 percent of the bank’s 288,000 total staff. Bloomberg put the job cuts at about 10 percent. They each cited people that were not identified by name.
Executives met Thursday in Charlotte and will gather again Friday to make final decisions on the reductions, the Journal said. A spokesman for Bank of America wasn't available to comment on the job reductions.
Bank of America has already cut at least 6,000 jobs this year as part of its reorganization under CEO Brian Moynihan, who has been in the top spot since last year. Moynihan earlier this week unveiled a shake-up in the bank's management ranks, announcing that two key officers will leave and the promotion of two others to share the chief operating officer role.
“It’s time to simplify the organization, streamline the organization and make sure our business processes are relevant when you have a smaller, more focused company,” Moynihan told Bloomberg News in a Sept. 6 interview. “We just don’t need to be the biggest.”
Moynihan is trying to boost the bank’s profits amid concerns about exposure to the slowing U.S. economy and a slew of mortgage-related losses and lawsuits, the Journal reported. The bank, still struggling under the weight of toxic mortgage loans, says the moves are part of "delayering and simplifying" operations. It has more employees than most of its major competitors, and top executives have stressed the need to eliminate redundancies resulting from past acquisitions.
The bank recently sold $5 billion of preferred stock to Warren Buffett's Berkshire Hathaway and also agreed to sell half its stake in a Chinese bank. Bank of America is also trying to sell a large portion of its mortgage business, the newspaper said.
The Journal said that most of the job cuts are expected to be made on its consumer side. It got rid of 63 unprofitable branches between April and June and said it plans to close 750 of its nearly 6,000 locations in the next several years.
Bank of America Corp. started a cost cutting program called “New BAC” — after the company’s stock ticker — in the spring. Moynihan said Tuesday that the second phase of New BAC will begin next month and run through March.
The cost-cutting program is designed to make Bank of America simpler for investors and clients to understand, as well as easier for Moynihan and his deputies to manage, according to a Bloomberg News report.
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