Bank of America to cut 30,000 jobs

Ten per cent of workforce set to lose their jobs over the next few years in a bid to save $5bn a year.

    The cuts come on the top of 6,000 jobs which already were shed by the Bank of America[EPA]

    Bank of America is to cut 30,000 jobs over the next few years in a bid to save $5bn a year.

    The cost-cutting drive is part of a broader effort to reshape and shrink the US' largest bank as
    it copes with fallout from the housing bust.

    The cuts came on the day Barack Osama, the US President sent his $447bn jobs bill to Congress to help reduce the level of unemployment.

    The bank said it expects many of the cuts to come through attrition and eliminating unfilled positions through the cost-cutting programme called Project New BAC, named after the code for its shares on the stock market.

    The bank announced the job cuts in a statement shortly after Brian Moynihan, the bank's chief executive, disclosed the cost-saving goals in an address to investors saying "We're a much simpler company than we were 24 months ago".

    The Bank of America's stock had lost half its value this year, largely over problems related to poorly-written
    mortgages it acquired with its 2008 purchase of Countrywide Financial Corporation.

    Currently the bank is facing lawsuits from investors and regulators over the sales of mortgage-backed securities that lost value after the housing boom collapsed.

    The latest job cuts will lead to a 10 per cent reduction in the bank's work force of 288,000. The cuts come on top of 6,000 positions the bank has already eliminated through the third quarter of this year.

    The shares initially rose, then fell back again amid disappointment at the lack of detail given about the cost-cutting plans. Late in the session they recovered to close up by 1.3 per cent at $7.05

    The shares had lost about half their value in 2011 as fears grew that the bank may have to issue more shares to meet new global capital requirements.

    There was a brief recovery in August when it was announced that billionaire investor Warren Buffett had invested $5bn in the bank, but the shares have now fallen below the levels before that investment was made.

    SOURCE: Agencies


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