BofA Said to Plan More Than 300 Job Cuts at Montag Units
Bank of America Corp. (BAC), the second- largest U.S. lender, plans to cut more than 300 jobs from corporate and investment banking and trading units run by Thomas K. Montag as underperformers are culled from its ranks, according to a person briefed on the matter.
The firm will target workers on desks where business has slowed and may inform those affected this month, said the person, who declined to be identified because the Charlotte, North Carolina-based firm’s plans are private. The reductions are mostly separate from the companywide cost-cutting program called Project New BAC, the person said.
Wall Street firms including Bank of America and JPMorgan Chase & Co. (JPM) are dismissing staff as revenue wavers amid new regulations and the European debt crisis. Chief Executive Officer Brian T. Moynihan, whose efficiency plan may target as much as $8 billion in annual savings, announced 30,000 job cuts last year in retail banking and support units.
Reductions at the investment banking and trading units will be spread among junior and senior employees, said the person. The company will also reduce headcount in co-chief operating officer Montag’s operations by less than 2,000 people after selling non-U.S. wealth management units, said the person. Bank of America solicited bids last month for the business, which has about $90 billion in assets under management.
One planned change that did come from Project New BAC is a reorganization of junior investment bankers, said the person. The firm will consolidate employees working in related sectors, such as technology, telecommunications and media, so that they can be deployed to areas with the most business. The firm currently has junior employees devoted to specific industries.
The bank told investors in April that Project New BAC’s scrutiny of Montag’s units probably would be completed this month. Jessica Oppenheim, a Bank of America spokeswoman, said she couldn’t comment on the job cuts. The Wall Street Journal reported on the eliminations yesterday.
In March, Bank of America cut debt and equity traders and salespeople, including more than half a dozen in mortgages. The entire bank had 278,688 full-time workers as of March 31.
Moynihan, 52, has said he’s counting on trading units to help revive income at the lender, whose consumer operations have been hobbled by more than $40 billion of expenses tied to faulty mortgages. Montag’s units swung to a profit in the first quarter, with positive trading revenue every day.
Sales and trading revenue excluding accounting adjustments climbed to $5.2 billion in the first three months of the year from $2 billion in the fourth quarter and $5 billion a year earlier. Revenue in investment and corporate banking fell 5 percent to $4.5 billion from a year earlier on lower fees.
Bank of America reorganized its reporting lines this year, combining deposit, credit-card and small business units into a new consumer-and-business banking division led by co-Chief Operating Officer David Darnell, 59. He also oversees real estate and wealth-management units.
Operations run by Montag, 55, the former Goldman Sachs Group Inc. trading head promoted to co-chief operating officer in September, were split into global markets and banking units.
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