Bank of America Announces Plan to Slash 16,000 Jobs
Bank of America's plan would end its run as the largest banking employer in the U.S. and could reduce its workforce to around 260,000, below rivals Wells Fargo and JPMorgan Chase and its smallest headcount since 2008.
However, the program would accelerate the bank's plan to cut costs in the face of declining revenue, as the company's Project New BAC initiative aimed to slash 30,000 jobs by the end of next year and save $5 billion in annual costs. Project New BAC's cost savings ran behind in the second quarter, saving an annual estimate of $970 million to fall short of a $1 billion goal.
The company plans to shape operations in taking on less risk while increasing revenue from prior customers, detailed in a document given to top management according to TheWall Street Journal. Bank of America aims to reduce both local branches and its mortgage operation while refocusing on its investment banking business in Merrill Lynch, the document said.
The move comes as part of a series of reforms by CEO Brian Moynihan since he assumed his role in 2010. Moynihan has dismissed Bank of America's previous strategies for expansion pursued by his predecessors, instead aiming to turn the bank into a more efficient and lean machine. Moynihan has reduced total assets since his rise by nearly 7%, with share prices down 37% since he took over.
Shares of Bank of America fell more than 1% in early Thursday trading.
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