Bank of America Plans to cut 30,000 Jobs
Tuesday, September 13, 2011 3:08Bank of America is to cut 30,000 jobs over the next few years as part of a cost-cutting programme.
The cuts represent about 10% of the company’s workforce. Bank of America wants to save about $5bn (£3.2bn) a year as it slims down the bank that was hit hard by the sub-prime mortgage crisis. The cuts came on the day that President Barack Obama sent his $447bn jobs bill to Congress – his attempt to reduce the level of unemployment.
Bank of America is calling the cost-cutting programme Project New BAC, named after the code for its shares on the stock market. It has also been selling off assets; last month it sold half of its 10% stake in China Construction Bank. The shares initially rose, then fell back again amid disappointment at the lack of detail given about the cost-cutting plans. Late in the session they recovered to close up by 1.3%.
Last week, it was reported that Bank of America would be cutting 40,000 jobs and present a detailed turnaround plan. The shares have lost about half their value this year as fears grow that it may have to issue more shares to meet new global capital requirements. There was a brief recovery last month when it was announced that billionaire investor Warren Buffett had invested $5bn in the bank, but the shares have now fallen below the levels before that investment was made.
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