Bank of America to cut 30,000 jobs

The restructuring is being carried out under the bank's cost-cutting 'Project New BAC' initiative.

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Bank of America (BofA) today said it will cut 30,000 jobs over the next few years as part of its plans to reduce USD 5 billion dollars in costs annually by 2014 under a restructuring exercise.

The restructuring is being carried out under the bank’s cost-cutting ‘Project New BAC’ initiative,aimed at making it “a more focused,leaner and more efficient company” that provides its customers with the “best financial services,generating strong revenues,carefully managing expenses and risks and delivering long-term value for shareholders.”

The first phase of the BAC restructuring involves the bank’s consumer banking operations,home loan,technology and support operations.

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In the second phase,which begins in October and would continue through March,2012,other parts of the business,including Bank of America Merrill Lynch,will be reviewed.

As Project New BAC is implemented,”employment levels in the areas under review during Phase I are expected to be reduced by approximately 30,000 jobs over the next few years.”

The company,which currently employs 288,000 people,expects that attrition and the elimination of appropriate unfilled roles will constitute a significant part of the anticipated decrease in jobs.

“The job cuts will help reduce USD 5 billion in expenses annually by 2014,on a baseline of USD 27 billion in annual expenses for the areas the company reviewed.

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“The company continues to sell non-core business units and assets that do not support its strategy,thereby strengthening the balance sheet and improving capital and liquidity,” it said.

Earlier in the day,in a speech at an investor conference organised by Barclays,Bank of America Chief Executive Brian Moynihan outlined plans to make the United States’ largest bank more efficient and profitable even if it came at the cost of sacrificing scale.

“We do not have to be the biggest company out there. We have to be the best,” he said.

The USD 5 billion cut will involve shutting some of the bank’s 63 data centres,eliminating overlapping deposit systems and trimming layers of back-office staff.

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“It is taking out work we do not need to do any more and getting it out of the company,” Moynihan said.

“We are a much simpler company than we were 24 months ago.

In the last few weeks,the company has announced a management shake-up,a USD 5 billion investment by Warren Buffett and the sale of more than USD 15 billion in assets.