Bank of America: 35,000 job cuts

[DerekLeung]

Bank of America: 35,000 job cuts

Merrill Lynch (pictured) has a workforce of about 61,000, while bank of America employs 247,000 people. The job cuts across both companies are aimed at saving US$7 billion (S$10.4 billion) in annual costs. -- PHOTO: REUTERS

NEW YORK: Bank of America said on Thursday it plans to eliminate 30,000 to 35,000 jobs over three years, reflecting its pending purchase of Merrill Lynch and weaker business activity stemming from the economic recession.

The cuts could affect as much as 11.4 per cent of the combined companies' workforce of about 308,000 people, and are intended to help save US$7 billion (S$10.4 billion) of annual costs.

Bank of America said the cuts will come from both companies and affect all business lines, and in part reflect 'the weak economic environment, which is affecting the level of business activity'. The Charlotte, North Carolina-based bank said it will not determine the final number of cuts until early next year, and that as many as possible will come through attrition.

Bank of America employs about 247,000 people and Merrill Lynch about 61,000. The merger values Merrill Lynch at about US$20.5 billion and is expected to close on Jan 1, creating the largest United States bank by assets.

Financial companies have announced more than 250,000 job cuts this year, according to outplacement firm Challenger, Gray & Christmas, as losses soared from mortgages, credit cards and securities write-downs.

Bank of America announced its cuts less than four weeks after Citigroup set plans to eliminate 52,000 jobs, or 15 per cent of its workforce, by early next year.

'If you asked me six months ago I would be surprised, but in this day and age, it doesn't look as draconian, compared with what Citigroup did,' said Mr Howard Diamond, chief executive of Diamond Consultants, a New Jersey recruiter.

Bank of America previously said it would cut 7,500 jobs following the July 1 purchase of mortgage lender Countrywide Financial.

Bank of America spokesman Scott Silvestri said the bank would not elaborate on where the latest job cuts will come from, how many might come from attrition, or where business activity had been hurt.

Eventual losses may be 'substantially higher' than 35,000, with many coming from the middle ranks, said Mr Gustavo Dolfino, president of WhiteRock Group, a New York-based recruiter.

Shareholders of Bank of America and Merrill Lynch approved the merger on Dec 5. The transaction was originally valued at US$50 billion, but the value has fallen because Bank of America shares have declined.

REUTERS

 

[DerekLeung]

Fate of BoA staff in Singapore still unclear

By Robin Chan & Gabriel Chen

THE fate of local staff of the Bank of America (BoA) remains unclear after the giant company announced that it would slash 30,000 to 35,000 jobs across the world over the next three years.

The Straits Times understands that the bank employs more than 2,300 staff across the Asia-Pacific region, but it is unclear how many work at its Republic Plaza office here.

BoA also owns giant investment bank Merrill Lynch - acquired in a fire-sale deal during September's financial meltdown - which has a sizeable unit here.

Merrill employs about 1,500 staff across front- and back-end services, making it one of the largest financial services employers in Singapore.

Mr Rob Stewart, Merrill Lynch's Asia-Pacific spokesman in Hong Kong, declined comment.

A BoA spokesman in Singapore said: 'Details about specific reductions in communities, markets, or by line of business, have not been determined.'

Meanwhile, job losses are piling up here, with analysts estimating that 10,000 people will be laid off this year, while the number next year could well surpass the high of 30,000 set in 1998.

Philips Electronics said on Wednesday that it was axing close to 100 staff - or 5 per cent of its consumer lifestyle sector - here as part of a worldwide cutback to focus its business. The affected staff have been informed.

The Straits Times also understands that job cuts at Credit Suisse have begun this week, with some employees in the investment banking division told to go.

Credit Suisse announced last week that it would slash 5,300 jobs, or 11 per cent of its total staff worldwide, as part of a restructuring exercise.

Trade union heads have been urged by Mr Lim Swee Say, secretary-general of the National Trades Union Congress (NTUC), to meet bosses to help on saving costs and preserving jobs.

NTUC deputy secretary-general Heng Chee How told The Straits Times that companies should continue to communicate closely with their employees and unions, because clear and early information would address uncertainty, allay fears and quell rumours even if the news is bad. Management should also proactively seek business and look for ways to save costs and cut waste, to show their employees they are not just relying on cost- cutting and retrenchments to survive.

Companies can retain staff by sending them for training, as opposed to retrenching, using the government-initiated $600 million Skills Programme for Upgrading and Resilience.

Even for multinational companies, Singapore Bank Employees' Union general secretary Bobby Tay agreed that retrenchment should not be a first resort. He said those operating here should have a sense of social responsibility and look at ways to retain staff as far as possible.