Bank Of America To Axe 35,000 Jobs By 2011

By: CBS News
By: CBS News

CHARLOTTE, NC - Bank of America Corp. said Thursday it expects to eliminate 30,000 to 35,000 jobs over the next three years, as it faces a deteriorating economic environment and tries to absorb Merrill Lynch & Co.

Charlotte, North Carolina-based Bank of America said it hasn't yet completed its analysis for eliminating positions, and a final number will not be determined until early next year. It said the cuts will affect workers from both companies and all types of businesses.

Thursday's announcement of job cuts was hardly unexpected, considering the merger and the wave of job losses seen in the banking industry and in other sectors over the past few months. Bank of America and Merrill Lynch have already eliminated thousands of investment banking jobs over the past year, as have other banks, in an effort to lower costs as they face increasing defaults in mortgages, credit card debt and other loans.

Bank of America is considered one of the healthier U.S. banks, and its decision illustrates how widespread the wave of layoffs hitting the United States is. The nation lost more than half a million jobs in November alone.

New York-based Citigroup Inc. has been slashing jobs the most - by next year, Citigroup expects to have shrunk its work force by 75,000, or 20 percent, since its headcount peaked in late 2007.

JPMorgan Chase & Co. is shedding about 7,000 employees, or 10 percent, of its investment bank staff, and cutting 9,200 jobs at Washington Mutual Inc., the bank it acquired in September. Goldman Sachs Group Inc. and Morgan Stanley, meanwhile, are reducing their staffs by about 10 percent.

The shotgun deal between Bank of America and Merrill, valued at $50 billion when it was initially announced in September, was struck as the solvency of investment banks was in grave doubt, and kept Merrill from a complete meltdown like the one suffered by Lehman Brothers Holdings Inc., which was forced to file for bankruptcy. Shareholders of both companies voted to approve the deal last week and it is expected to close by Jan. 1.

Bank of America shares fell $1.78, or 11 percent, to close at $14.91 on Thursday, while Merrill shares fell $1.43, or 10 percent, to $12.67.

In after-hours trading, Bank of America shares rose 12 cents to $15.03, and Merrill shares rose a penny to $12.68.


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