Bank of America (BAC) said Monday that it plans to cut some 30,000 jobs in total over the next several years and $5 billion a year by 2014. The announcement comes less than a week after BofA fired wealth-management head Sallie Krawcheck as part of a reorganization.
The company says, however, that it continues to hire financial advisors.
“Bank of America’s Project New BAC is key to the company’s strategy of focusing all of its resources on serving individuals, companies, and institutional investors,” it said in a statement.
“The first result of New BAC was the recently announced management reorganization, removing a layer of management and streamlining the company by aligning its businesses with the customer groups,” it explained.
“As the decisions are 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,” BofA explained. “The company expects that attrition and the elimination of appropriate unfilled roles will be a significant part of the anticipated decrease in jobs.”
BofA says it expects the first stage of its cost-cutting efforts to “lead to net expense reductions of $5 billion per year by 2014, on a baseline of $27 billion in annual expenses for the areas the company reviewed.”
Bank of America CEO Brian Moynihan said last week that he was reorganizing the bank’s management and operating units around its three core customer groups: individuals, companies and institutional investors. As part of this shuffle, Sallie Krawcheck lost her job as head of wealth management (which includes Merrill Lynch).
Moynihan appointed David Darnell and Tom Montag to the new posts of co-chief operating officers and made them immediately accountable for all operations. Darnell was put in charge of the “individual customer” track, including the16,240-strong Merrill Lynch advisor force, Merrill Edge advisors and reps with U.S. Trust.
The number of Merrill Lynch advisors rose to 16,241 in the second quarter of 2010, up from 15,299 last year and 15,695 in the first quarter. Sales (or fees and commissions) per advisor on a trailing-12-month basis totaled $894,000 in Q2 vs. $843,000 last year and $931,000 in Q1.