BofA speeds up plans to cut 16,000 jobs: WSJ
(Reuters) - Bank of America Corp is speeding up planned job cuts as revenue continues to decline amid new regulations and a tepid economy, the Wall Street Journal reported.
The second-largest U.S. bank intends to slash 16,000 jobs by year-end, putting it a year ahead of a plan to eliminate 30,000 under a cost-cutting program called Project New BAC, the newspaper said, citing a document given to top management.
The bank began cutting jobs last fall and had been expected to complete the task by the end of 2013.
Bank of America has lagged rivals in recovering from the financial crisis, largely due to mortgage-related losses. Total revenue has declined for four straight quarters, raising investor concerns about how it will boost earnings.
"Given the uncertainty in the economy, expense savings and efficiencies are the primary catalyst that they have for earnings growth over the next year," Guggenheim Partners analyst Marty Mosby said.
Other banks are also turning to cost-cutting as a way to improve profits, Mosby said.
A person familiar with the planning for New BAC told Reuters the reported acceleration of the cost-cutting was surprising because the plan was on track and had been well-received by Wall Street.
One challenge in cutting jobs more rapidly will be implementing new systems fast enough as more work is automated, the person said.
Since taking the helm in 2010, Chief Executive Brian Moynihan has been working to streamline and reduce risk at Bank of America by selling off assets and business units not considered essential. The bank has lost its perch as the largest U.S. bank by assets and could fall below JPMorgan Chase & Co and Wells Fargo & Co in total employees. Continued...