Bank of America is planning to shed 16,000 jobs by the end of 2012, reports the Wall Street Journal. The dramatic reduction in employees is part of a wider cost-cutting exercise and would see Bank of America lose its position as the biggest employer in US banking.
A document handed to top management at the company reveals how this would mean fewer Bank of America branches on Main Street as well as a smaller mortgage operation. The aim, states the document, is to create a sleeker, more focused enterprise over the final months of 2012.
The goal of the plan is to reduce risk-taking at the company and generate more revenue out of existing Bank of America customers. It would also allow the company to use an investment banking operation inherited from Merrill Lynch & Co., something that could help Bank of America become a significant deal maker around the world.
Should the cuts go ahead as planned, that would leave the company with a workforce of 260,000 at year’s end, its lowest employee count since 2008. It would also mean J.P. Morgan Chase, Citigroup Inc., and Wells Fargo all would have larger workforces.
The figure of 16,000 is not yet set in stone however. A source at the company informed the Wall Street Journal that the number could fluctuate, depending on the company’s performance for the rest of the calendar year.
The plan is part of Chief Executive Brian Moynihan’s strategy to turn Bank of America into a leaner, more efficient operation. Moynihan is bidding to convince investors that expenses can be tweaked to compensate for revenue lost to new regulations, unstable markets, and an imbalanced economy.
Since Mr. Moynihan took over as CEO from Kenneth D. Lewis in 2012, the company’s shares have dropped 37 percent. However, in 2012 so far, Bank of America shares are up 69 percent.