Bank of America cuts more than 2,600 jobs

Published: Jul. 18, 2016 at 4:53 PM EDT
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CHARLOTTE, NC (Deon Roberts/The Charlotte Observer) - Bank of America continues trimming its workforce, with recent cuts focusing on highly paid managerial positions, the Charlotte-based company disclosed Monday.

The bank eliminated 2,667 positions in the second quarter, the latest reductions as CEO Brian Moynihan remains focused on slashing expenses. Following the cuts, the bank has 210,516 employees, down by more than 6,100 from a year ago, the company announced in its second-quarter earnings report.

Chief Financial Officer Paul Donofrio, speaking on a conference call with analysts, said "the employee base continues to drive lower." Cuts made more recently have centered on high-paying management roles, he said.

The reductions add to the tens of thousands of positions Moynihan has eliminated through layoffs, attrition and business sales since becoming CEO in 2010. Some of the reductions have been in Charlotte, where the bank says it employs about 15,000.

Many of the cuts have come in a unit Bank of America launched in 2011 to deal with large numbers of soured mortgages, many of which it inherited from its 2008 purchase of home loan giant Countrywide. The bank has reduced employment in the unit, as it has lowered the number of troubled mortgages on its books since the recession. Moynihan said Monday that about 900 of the second-quarter job cuts were in the unit, where the bank plans to further reduce costs.

Banks everywhere have been cutting jobs since the recession to cope with a variety of market changes, from fluctuations in mortgage rates to reduced need for branches. San Francisco-based Wells Fargo shed 700 positions in the second quarter.

At Bank of America, additional job cuts are possible as it seeks to lower expenses to boost profits. The bank said Monday that its second-quarter net income fell about 18 percent to $4.2 billion, as low-interest rates squeezed profits. The results, however, beat analyst expectations.

The bank's stock was up nearly 4 percent to $14.20 in early afternoon trading.

Executives said Monday they want to reduce annual noninterest expenses to about $53 billion by the end of 2018 – from about $56.3 billion over the past 12 months. Annualized expenses had been as high as about $70 billion in 2011, when Moynihan launched his now-completed Project New BAC cost-cutting program.

Bank of America plans to chop costs through its ongoing Simplify and Improve initiative, which is designed to streamline work processes.

Donofrio said as non-customer-facing positions are eliminated through the initiative, the bank has continued to add employees in other areas, such as sales staff. Those additions come as banks everywhere seek to grow revenues at a time when low interest rates constrain their profitability.