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Bank of America Said to Fire as Many as 400 Employees Globally

Bank of America Said to Fire as Many as 400 Employees
Bank of America Corp. , the largest U.S. bank by assets, is firing as many as 400 employees in its global banking and markets division after a management review, according to a person briefed on the matter. Photographer: Jin Lee/Bloomberg

Bank of America Corp., the largest U.S. lender by assets, is firing as many as 400 employees in its global banking and markets division as revenue from trading and advising clients declines, a person briefed on the matter said.

The moves follow a review led by Thomas Montag, the former Goldman Sachs Group Inc. partner who joined the Charlotte, North Carolina-based bank through the purchase of Merrill Lynch & Co. in 2009. Employees ranging in seniority from managing directors to junior analysts will be affected by immediate dismissals, the person said, speaking on the condition of anonymity because the decision hasn’t been publicly announced.

“This sounds like an acceleration of the usual year-end cutbacks among the lowest performers in each business,” said Richard Lipstein, a consultant at Boyden Global Executive Search in New York. “Despite concerns over the markets, Wall Street executives are trying hard not to turn the layoff spigot on.”

Firms including Barclays Capital and Credit Suisse Group AG have begun cutting staffs as the fixed-income trading boom slows. In the third quarter, the five largest Wall Street banks may produce their lowest revenue from investment banking and trading since the fourth quarter of 2008, when they had combined negative revenue of $3.35 billion, analysts have said.

Bank of America’s banking and markets business hired more than 800 people outside the U.S. in the past 18 months, extending Merrill Lynch’s reach, Chief Executive Officer Brian Moynihan, 50, said last week at an investment conference in New York. The company hasn’t said how many people work in the business unit or how many have been added in the U.S.

Other Banks

Barclays Capital added 3,600 people in the 12 months ended June 30, while Credit Suisse picked up 1,300. Credit Suisse said in August it will eliminate 75 posts in the U.K., while Barclays Capital is cutting 300 administrative jobs, a person with knowledge of the matter said at the time.

Securities firms around the world will cut as many as 80,000 jobs in the next 18 months as revenue growth begins to slow, bank analyst Meredith Whitney of Meredith Whitney Advisory Group LLC said in a report dated Aug. 31.

Bank of America’s banking and markets business had a profit of $4.1 billion in the first half, a 35 percent decline from a year earlier when it reported a $3.8 billion pretax gain from the sale of its merchant-processing business. Sales and trading revenue increased 0.7 percent as fixed-income, currency and commodities trading exceeded declining equity income.

The firings don’t reflect a strategy shift at Bank of America, the person briefed on the matter said. The company “is confident that we’ll move to number one in investment banking in the world,” Moynihan said last week at a Barclays Capital conference in New York.

“I wouldn’t be surprised to see similar types of reductions at many other companies as they right-size their staffs,” said Tom Lewandowski, an analyst at Edward Jones & Co. in St. Louis who has a “buy” rating on Bank of America stock. “There has been a decline in overall business as people head to the sidelines in many areas of trading.”

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