Bank of America will eliminate 3,500 jobs by the end of September, joining a growing list of banks repositioning themselves world-wide amid stubbornly slow economic recoveries. For BofA, the biggest US bank by assets, the job cuts continue a broad push to slash expenses and build capital as it grapples with a $1 trillion portfolio of problem home mortgage loans.
The job cuts, disclosed in an internal memorandum, are expected to be supplemented by additional cost-cutting in future quarters as part of a previously announced efficiency programme. "The third-quarter reductions in force are not part of the New BAC Project, through which employees and managers are working to transform policies, practices and organisations to better align to the company's customer-driven strategy," the memo obtained by Reuters said.
Global banks have announced close to 50,000 job cuts in recent months, with some expected to extend into 2012. Bank of New York Mellon Corp last week said it plans to cut about 1,500 jobs, or 3 percent of its workforce. Slashing expenses is one of the few short-term options left for Bank of America to improve profitability amid a sluggish economy and an extended period of rock-bottom interest rates, analysts said.