Bank of America Cuts 14,600 Employees in 2012 to Reduce CostsMichael J. Moore and Hugh Son
Bank of America Corp., the lender planning to cut $8 billion of expenses to improve profitability, reduced its staff by 14,601 employees last year.
The cuts, including about 5,400 in the fourth quarter, represented 5 percent of the bank’s workforce, which totals 267,190, according to figures posted today on the Charlotte, North Carolina company’s website. The quarter’s decline in headcount was the highest in a year.
About 3,000 of the reductions came from the bank’s legacy assets and servicing division, called LAS, that handles delinquent mortgages and foreclosures. Chief Executive Officer Brian T. Moynihan has targeted that business for cost cuts as credit quality improves and dropped headcount in the third quarter for the first time in more than three years.
“As we look forward in the fourth quarter, we expect to see further reductions,” Moynihan said in December. “While the exact timing is not entirely clear, we expect that the $3 billion of quarterly expense in LAS in the third quarter should eventually return to a level similar to early 2008 of about $500 million a quarter.”
The lender also cut 6,000 contractors in its legacy asset unit, bringing that total to 11,000. The decline in the LAS business was driven by offshore cuts, the bank said in a presentation.
Bank of America, ranked second by assets among U.S. lenders, still has about 8,000 more employees than JPMorgan Chase & Co., the largest U.S. bank. The reductions in the fourth quarter outpaced the trend Moynihan laid out in October.
“We are dropping about 3,000 a quarter, and we should stay on that path, as best we can tell,” Moynihan said in October. “We’re trying to mitigate the human side of this by looking for every place we can have our teammates join us and do something else.”