The math is very crude. The Wall Street Journal reports that Bank of America Corp. (NYSE: BAC), still desperate to turn itself around, will fire 16,000 people this year. Compare that to the 100,000 jobs a month, on average, that the American economy has added in 2012. That puts the financial firm's layoffs in some perspective, although many economists would say one company's downsizing and national employment numbers are apples and oranges.
The apples and oranges criticism is right. But Bank of America is not the only large company that faces a weak economy and the results of years of poor management. Even executives at well-run companies have begun to sweat about the financial cliff, and Europe, and China, and housing, personal debt and consumer confidence. The same worries extend down to tens of thousands of smaller companies. The long knives have come out, or are about to, wielded by managements across a wide array of industries and located in almost every geographic section of the country.
One theory about unemployment in the United States is that QE3 will help the jobs market, and that Congress and the Administration will not change the tax system. And, additionally, consumers may rush to stores this holiday season and salvage what is already a troubled retail industry - an industry that is one of the largest employers in America. All of a sudden, the jobs situation will improve and the joblessness number will plunge well below 8% as 2013 begins.
But too many companies have trouble that looks like Bank of America's, or perhaps not as bad, but bad enough. Add to the private sector the effects of austerity and low tax receipts among municipalities and states. Many months, the largest drag on the official jobs figure is layoffs in the public sector.
Bank of America is a unique case. The financial firm has struggled to stay viable against a sea of lawsuits and a portfolio of bad loans. But, if the economy were in fine shape, Bank of America probably would not be so badly off. Neither would a huge number of other U.S. companies – whether or not they are run well.
Douglas A. McIntyre
Filed under: 24/7 Wall St. Wire, Banking, Jobs Tagged: BAC, featured