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Our nation’s largest bank is in some serious financial trouble, and it’s trickling down to the everyday people like you and me. Indicative of our economy’s state and in a last-ditch effort to save money, Bank of America is eliminating at least 3,500 jobs over the next few months. It is not currently known where the cuts will take place.
Brian Moynihan, the chief executive of Bank of America, explains that he hopes to trim quarterly expenses by $1.5 billion, and he sees thousands more job cuts in the months ahead, according to the New York Times. The bank is looking to restructure at the request of its shareholders in order to remain profitable and competitive amidst another economic recession. Bank of America hasn’t been faring to well on the stock market, as its stock has been down 50% since January. Since the beginning of this year, shares fell drastically from $15 a share to $7.01 a share.
“I know it is tough to have to manage through reductions,” Moynihan wrote in a company memo last week. “But we owe it to our customers and our shareholders to remain competitive, efficient and manage our expenses carefully.”
The memo went on to explain that Bank of America was revamping the company in order to remain competitive in a tight financial market. Next month the company might reveal plans for another staff cut, which could affect more than 10,000 employees. Many of the 3,500 employees have already received the word that their jobs were soon to be on the chopping block, and the entire company will face reductions. The job cuts will also affect the company’s Merrill Lynch department, which Bank of America bought in 2008 during the hardest part of the recession.
Bank of America is no stranger to personnel cuts, though. The company cut approximately 2,500 jobs in the first half of the year. The bank employs roughly about 280,000 employees. Even more than its competitors, Bank of America has been hit hard by the failing housing market and the jump in foreclosures.
“While the markets reflect many economic factors we cannot control, we must stay focused on what we can control,” Moynihan said in the memo.
Since the recession of 2008, Bank of America has been plagued by bad business deals — namely with the purchase of Countrywide Financial, one of the main contributors to the rapid decline of the housing market in the Great Recession.
