Heavy job cuts at Bank of America

25 October 2007

Bank of America plans to cut 3,000 jobs, mainly in the investment banking sector, after announcing trading losses of about $4 billion.

In a statement reported by Bloomberg, the second-biggest US bank said that Brian Moynhihan will replace Gene Taylor as head of the 20,000 person securities unit.

Scaling back on staff has been expected after profits in the investment banking division plunged to $100 million and Kenneth Lewis, chief executive officer blamed the drop on the bank's mistakes.

But analysts have been surprised by the extent of the cuts.

Speaking to Bloomberg, Jefferson Harralson, an analyst at KWB Inc, said: "Ken Lewis was clearly disappointed by the performance and the bank's risk management. He is moving quickly to boost earnings for next year.

"These cuts are higher than what I was anticipating," he added.

The reductions represent under two per cent of the total workforce employed by the bank and are set to involved business lending, treasury services, capital markets and advisory service employees.

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