With Bank of America's cost-cutting plan, which includes the workforce reduction and closing 200 branches, it will no longer be the nation's largest bank.
By the end of the year, Bank of America Corp. hopes to get rid of 16,000 jobs, close 200 branches and shrink its mortgage operation, according to a document sent to top management.
The institution is accelerating its cost-cutting strategy, planning to pare its operations so much that it will lose its spot as the nation's largest bank employer. The company will fall behind the likes of JPMorgan Chase & Co., Wells Fargo & Co. and Citigroup Inc.
The proposed cuts would bring Bank of America's workforce down to 260,000 by year-end, according to the document, which was summarized for the Wall Street Journal.
Chief Executive Brian Moynihan, in his attempts to make the company more focused and profitable after its disastrous 2008 takeover of mortgage giant Countrywide Financial Corp., is aiming to trim the employee count by 30,000 to save some $5 billion in its first round of cuts. The 16,000 jobs set to be cut by year's end would be part of that first phase.
A spokesman declined to comment.
Through the end of the second quarter, which ended June 30, the number of junior investors has fallen 23% compared with September 2011, according to the Journal report.
The unit handling troubled loans had 55,000 workers by mid-2012, but will be reduced to 50,000 later this year, according to the Journal report. The number of employees in the global wealth and investment management sector will hold steady. In the consumer banking department, 5,300 workers will go; 3,200 employees overseeing new mortgages will be cut.
Bank of America shut down 178 branches last year and will close an additional 200 this year, according to the Journal report.
The bank has slimmed down enough — partly by dropping high-risk loans — to report a second-quarter profit in July of $2.5 billion, or 19 cents a share, beating Wall Street expectations. Revenue, however, shrank to $22 billion.
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