Bank of America to slash 35,000 jobs over 3 years

ByABC News
December 11, 2008, 11:48 PM

— -- In the latest blow to workers in the struggling financial services sector, Bank of America on Thursday said it will eliminate as many as 35,000 jobs in the next three years, to better position itself in a recession that already is hurting business.

The bank says it will also eliminate many redundant positions after it completes its merger with brokerage firm Merrill Lynch on Jan. 1.

"Clearly, there will be duplication of positions, and there are many high-cost employees on the investment banking side that won't be needed," says Eric Boyce, a portfolio manager at Hester Capital Management in Austin.

Thursday's announcement affecting roughly 11% of the remaining workforce comes after the Charlotte bank's 7,500 job cuts in June and Merrill Lynch's 10,000 cuts in November. Bank of America's latest reduction would also be one of the largest in corporate history, and the second-largest announced this year, after the 52,000 cuts that Citigroup announced in November, according to outplacement consultants Challenger Gray & Christmas.

The bank's shares, which are down 64% this year, fell 11% to $14.91 on Thursday ahead of the news.

Bank of America, under CEO Kenneth Lewis, has made many bold acquisitions, including this year's purchases of mortgage giant Countrywide Financial and Merrill Lynch. Those acquisitions have transformed the bank into the nation's largest player in wealth management and mortgages. It already had the USA's largest branch banking network, with 6,100 banking offices. "Our diversified business model will help. Because we offer a wide range of financial services we are not captive to an always increasing need for interest income," said Lewis recently in a speech to the Detroit Economic Club.