BofA plans 30,000 job cuts
Updated: 2011-09-13 10:05
A Bank of America shareholder walks into the corporate headquarters prior to the start of the Bank of America annual shareholders meeting in Charlotte, North Carolina May 11, 2011. [Photo/Agencies]
Bank of America Corp said it will cut 30,000 jobs and slash annual expenses by $5 billion, but investors were unimpressed with the plan and the lack of details on how it will be accomplished.
The staff reductions amount to more than 10 percent of the bank's workforce, and come as chief executive Brian Moynihan struggles to fix a bank whose share price has dropped nearly 50 percent this year.
"It was pretty underwhelming," said Jason Ware, an analyst at Albion Financial Group, referring to the bank's plan.
"They need to address the bigger issues the bank faces," Ware said.
Bank of America was built through decades of acquisitions, many of which were never properly integrated, and some of which have triggered disastrous losses. The $2.5 billion purchase of Countrywide Financial in 2008 has left Bank of America with billions of dollars of bad assets and legal liabilities.
Moynihan said the bank's initial focus is on cutting costs in the consumer bank through measures like combining data centers. He projected $5 billion of annual savings by 2014.
The job cuts will happen over the next several years, with many coming from attrition. The bank signaled its retrenchment last week when consumer banking head Joe Price and retail brokerage head Sallie Krawcheck were let go.