Bank of America Will Cut At Least 30,000 Employees Before 2012
Bank of America Corp. (BAC) announced Thursday it will eliminate between 30,000 and 35,000 employees within the next three years. The staff reduction is a response to the pending merger with Merrill Lynch & Co. Inc. (MER) and the weak economic environment, "which is affecting the level of business activity," according to a B of A press statement. "The reductions are designed to eliminate redundancies created as a result of the merger with Merrill Lynch and to reflect the current recessionary environment," the statement read. A final number of eliminations will not be determined until early 2009 and details had not been determined and were not available at the time this story was published. The job reductions will come from both companies and will affect all lines of business, B of A said. "Bank of America continues to do business actively with all of its client segments," the statement read. Rumors began circulating early last week when CNBC’s Charlie Gasparino reported Tuesday that the North Carolina-based bank could be readying as many as 30,000 jobs for the scrap heap as part of the merger of the two financial giants. Under the terms of the transaction, Merrill Lynch will become a wholly-owned subsidiary of Bank of America, and its stockholders will receive 0.8595 of a share of Bank of America common stock for each share of Merrill Lynch common stock held immediately prior to the merger. The acquisition is expected to close by the end of the year, pending the receipt of regulatory approvals. The pending merger with Merrill Lynch -- which was approved by shareholders last week and is targeted to close on Jan. 1, 2009, is not BofA’s only integration this year. The bank also purchased troubled mortgage lender Countrywide Financial Corp. on July 1, making it the largest mortgage lender and servicer in the country. The addition of Merrill will give it the nation’s largest stock brokerage and a large investment bank to boot. Write to Diana Golobay at firstname.lastname@example.org. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.