Bank of America to chop 30,000 jobs to reduce costs
Bank of America said it is cutting 30,000 jobs in the coming years as it looks to slash annual expenses by $5 billion, but investors were disappointed in the scant new detail the bank provided about its plans.
The bank’s chief executive, Brian Moynihan, said Bank of America is focusing for now on cutting costs in consumer banking and is taking steps like combining data centers to reach its target. Many of the job cuts will come from attrition and eliminating positions that are open now, the bank said.
Bank of America’s shares have lost more than half their value this year as mortgage litigation and a weakening economy threatened to sap the bank’s profits for years.
Media reports last week said the bank could cut as many as 40,000 jobs, and many investors had hoped the bank would announce a dramatic turnaround plan yesterday to show how it is addressing its difficulties.
The Moynihan speech “was pretty underwhelming,” said Jason Ware, equity analyst at Salt Lake City-based Albion Financial Group. “They need to address the bigger issues the bank faces.”
Bank of America built itself through acquisitions over decades and, according to analysts, has not properly integrated systems or closed unnecessary branches.
Bank of America has about 50 senior employees reviewing some 150,000 ideas for cutting costs, Moynihan said.