In order to cope with their mounting losses and staggering financial difficulties, Bank of America President Brian T. Moynihan has let the big secret out of the bag, the one that everyone was guessing on: tens upon thousands of BofA employees will be unemployed in the near future.
The exact number is at about 30,000 upwards to 40,000 jobs to be cut down from the BofA workforce. The bank has expectations of “streamlining its consumer banking operations,” in an article posted by Delaware Online. By any means, it will be a staggering elimination.
Although he has let out that there will be cuts, no doubt, Moynihan was mum on the details of when they will come about. With the holiday season approaching, many employees are surely hoping he will wait a little while. The Wall Street Journal has the amount of employees being given “the ax” at some “14 percent of the bank’s 280,000 staff” or “40,000 employees.”
This, as the executives hope, will reduce costs on the bank’s budget. 6,000 jobs were cut earlier in 2011, so the total could reach some near 50,000 by the time the cuts are effective.
Bank of America is not alone in making such drastic adjustments. As Delaware Online reported, “the 50 largest global banks have announced almost 60,000 job reductions for 2011, the fastest rate since 2008, according to data compiled by Bloomberg. Regulators are pushing firms to hold more capital, and companies are restructuring businesses to improve profitability as the U.S. economy stagnates.”
But for Bank of America, sweeping changes continue to be implemented, such as a planned reorganization for six businesses into just two. Those changes thrust Thomas K. Montag and David Darnell into the spotlight, as co-chief operating officers. Meanwhile, Sallie Krawcheck and Joseph Price were left unemployed as a result.
These changes are officially called “Project BAC.” The goal of the operation is this: “t o make Bank of America simpler for investors and clients to understand, as well as easier for Moynihan and his deputies to manage, said another person with direct knowledge of the plan. Moynihan has said he expects “significant” cost savings,” as reported by Delaware Online.
Significant cost savings, or any cost savings, would be beneficial to the ailing Bank of America. Its stock, for example, has dropped a startling 45%. Then, put that into perspective with the idea that American International Group (AIG) pounded them with a lawsuit as a result of $10 billion in mortgage loans. Even if many jobs will be the price of such a monumental move.