Thread: Bank of America Fires 3,000 workers and shakes up management

Bank of America to cut 3,000 jobs

Bank to review investment banking unit, shake up management
By Alistair Barr, MarketWatch
Oct 25, 2007

SAN FRANCISCO (MarketWatch) -- Bank of America said late Wednesday that it is cutting roughly 3,000 jobs and launching a strategic review of its investment banking business after recent poor performance from the unit.
Gene Taylor, head of Global Corporate and Investment Banking, will retire at the end of this year and be replaced by Brian Moynihan, who currently runs the company's Global Wealth and Investment Management business.

Bank of America shares fell 0.4%, to $47.29.

Most of the job cuts will be from Bank of America's (BAC:
bank of america corporation com

BAC 47.00, -0.48, -1.0%) investment banking unit, it said. Those reductions represent less than 2% of the company's staff. Business Lending, Treasury Services and Capital Markets and Advisory Services, as well as supporting infrastructure, will be affected, the bank said.

Bank of America reported a 31% drop in third-quarter profit last week as trading losses and a hit from loans backing leveraged buyouts nearly wiped out the company's investment-banking income. See full story.

After that hit, Chief Executive Ken Lewis said the bank would probably cut back, adding, "I've had all the fun I can stand in investment banking at the moment."

Many other banks have also been hit hard by this summer's credit crisis, which caused mortgage markets and leveraged buyouts to grind almost to a halt. Merrill Lynch reported its first quarterly loss in about six years on Wednesday after writing down almost $8 billion from exposures to collateralized debt obligations and subprime mortgages.

Bank of America is mainly a large retail bank and commercial lender. But it has been expanding into investment banking in recent years. On Wednesday, Lewis said the company wasn't pulling back completely from capital markets and investment banking.

Bank of America remains "committed to providing our commercial, corporate and institutional clients with the financial products and services they need to run their organizations effectively," he said in a statement.
Keith Banks, president of Columbia Management, Bank of America's asset management business, will replace Moynihan as president of Global Wealth and Investment Management, the company said. His successor will be named shortly, it added.

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ALIPAC NOTE: After being nationally disgraced for policies to offer credit cards to illegal immigrants, the national boycott of Bank of America which led to many Americans moving their mortgages and canceling their credit cards has had an impact on BofA. Visit www.bankofamericaboycott.com for more info.