Bank of America is back in the news. This time, they’re thinking of making a major contribution to the nation’s unemployment numbers with a restructuring plan that could eliminate as many as 40,000 jobs in the first phase alone. In August, BofA CEO Brian Moynihan warned of coming cuts, but predicted less than a tenth of this new projection. Moynihan emphasized that while the reductions in staff were unpleasant, “we owe it to our customers and shareholders to remain competitive, efficient and manage our expenses carefully.”
The new cuts will take place over the next three years, and BofA wasted no time in starting the process at the top by removing top managers Sallie Krawcheck, who managed the banks investment and wealth management units, and Joe Price, president of global consumer and small business banking. Bank of America hopes that the restructuring could help it get back in the black after dealing with lawsuits, billions of dollars of bad mortgage debts and horrible press from every side following its involvement in last fall’s robo-signing debacle and its 2008 acquisition of Countrywide.
Although analysts predict that the layoffs could potentially affect customer service because there may be fewer people to handle that issue, on the whole they predict that the bank will “pull out all stops to keep…business”. This could include slashing mortgage rates, extending existing credit lines or lowering interest rates on credit cards. Do you think it is possible that BofA could fail?
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