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. Last Updated: 07/27/2016

Bank of America to Cut Up to 10,000 Jobs




NEW YORK -- Bank of America Corp., the No. 1 U.S. bank, said Friday it would cut between 9,000 and 10,000 jobs, or nearly 7 percent of its work force, over the next year to reduce costs and fuel profit growth.


The Charlotte, North Carolina-based bank, which has about $680 billion in assets and around 4,500 branches in 21 states, will take a layoff-related charge of up to $500 million in the third quarter. The bulk of the job cuts will come from middle and senior management ranks.


No changes are expected in the Moscow representative office, but the Bank of America official, who wished to remain anonymous, would not comment further.


The bank, which now employs 150,000 people, expects to recoup the charge by the middle of next year through cost savings, it said.


Bank of America's restructuring comes as the U.S. banking industry struggles with the cost of higher interest rates and as the bank itself makes a concerted push to boost productivity and iron out wrinkles left over from its own 1998 merger, in which BankAmerica combined with Charlotte-based NationsBank.


The cuts mark the latest wave of sharp job reductions at the bank. Since its merger closed in September 1998, the bank has slashed about 25,000 jobs to save money and consolidate.


At Bank of America headquarters in Charlotte, North Carolina f and major outposts in San Francisco, California; Atlanta, Georgia; Jacksonville, Florida; and St. Louis, Missouri f the first pink slips already will go out Monday.


Most of the cuts would occur before the end of the year, spokesman Bob Stickler said.


Bank of America is the fifth-largest employer in the Carolinas, with about 18,000 employees in headquarters, call centers, branches and other offices there, according to a ranking by the Charlotte Observer newspaper.


Bank of America wants to eliminate internal inefficiencies and reinvest its capital after its merger.


The bank's second-quarter operating profits were little changed from last year's levels, at $2.06 billion, because of slack gains on investments and a slowdown in fees from new stock offerings.


Chief executive Hugh McColl has a reputation for strong cost control. Once an aggressive buyer of other banks, he also has backed away from that strategy and says Bank of America instead will focus on its online operations and non-branch banking services to grow.


Other U.S. banks, such as neighboring Charlotte-based First Union Corp. and Chicago's Bank One Corp., also recently have announced sweeping restructuring plans, to revive flagging profits and turn around troubled units.


Despite the expected third-quarter charge of $300 million to $500 million, Bank of America said it still expected operating earnings growth to be in the range of 12 percent to 15 percent on a per-share basis in 2000 and 2001, barring an economic slowdown.


The bank, as it thins out its layers of management, also said it would increase spending on Internet projects, open more private banking offices to cultivate business with wealthy clients and speed up the development of its investment banking operations in the United States, Europe and Asia.


It would put aside an additional $70 million for electronic commerce initiatives during the next six months and invest $25 million more than planned in brand development.


In an ironic twist, an organization that provides job training to people with disabilities, Goodwill Industries International, applauded Bank of America on Friday for its role in helping move people off welfare into banking jobs.