Dealbreaker reports that the Charlotte, N.C., company is
planning about 2,000 staff cuts in its investment banking, commercial banking
and non-U.S. wealth-management units, said people familiar with the situation.
Those operations were vastly expanded with Bank of America’s 2009 purchase of
Merrill Lynch & Co. The reductions are significant because of whom they
target: the high-earning employees whose efforts helped Merrill Lynch account
for the bulk of Bank of America’s profit since the financial crisis. The cuts
come on top of a plan announced last year that will see Bank of America
eliminate 30,000 jobs over three years in its consumer banking divisions…The
No. 2 U.S. bank by assets already is facing a wave of high-profile defections
in its institutional businesses, such as investment banking, amid Wall Street’s
annual post-bonus job-hopping season. The upheaval comes as investors are
pressuring banks to rein in expenses without giving ground competitively.
Despite a 46% rise this year, Bank of America shares have lost a third of their
value in the past year, amid questions about the industry’s profit outlook.
Cutbacks aren’t Bank of America’s only response to surging
costs. The bank is loath to cut too deeply in businesses, such as the
fixed-income trading operation, that are showing improvement and highly
competitive. One structural shift being planned will pool junior
investment-banking employees across different industry sectors so the younger
bankers can be routed to whatever area is most in demand at that moment, said
people familiar with the situation. Proponents say that move will help younger
workers gain more experience, while others say it will detract from the bank’s
service to clients.
People who don’t have an opinion on whether or not it will
work but love a good costume are excited about the rumor that the traveling
junior staff will be outfitted in one-piece racing suits with the words “Here
to Help” emblazoned on the back and every now and then, because the matching
ensembles practically beg for it, will break into song and dance like a regular
chorus line….
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