Bank of America (BAC) said today it expects to eliminate 30,000 to 35,000 jobs over the next three years, reflecting the weak economic environment as well as the bank's absorption of Merrill Lynch.
NEW YORK — Bank of America said today it expects to eliminate 30,000 to 35,000 jobs over the next three years.
The massive work force reduction reflects the weak economic environment as well as the bank’s absorption of Merrill Lynch, the Wall Street investment firm it agreed to buy in September.
Bank of America said it hasn’t yet completed its analysis for eliminating positions, and a final number will not be determined until early next year. It said the cuts will affect workers from both companies and all types of businesses.
Bank of America spokeswoman Melissa Kitlowski declined to comment directly on the layoffs, but said the firms are focused on maximizing and increasing U.S. stock coverage. A spokeswoman for Merrill Lynch also declined to comment.
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“All coverage decisions are being made with the goal of creating the strongest combined platform, not just for today but to facilitate future growth and opportunity,” Kitlowski said.
The shotgun deal between Bank of America and Merrill, valued at $50 billion when it was initially announced, was struck as the solvency of investment banks was in grave doubt.
The acquisition enables Bank of America to expand the financial services it offers its already huge customer base, and gives Merrill the protection and limits on risk that it needs to survive. Shortly after the Bank of America-Merrill deal was announced, the two remaining big independent investment banks, Goldman Sachs and Morgan Stanley, applied to become bank holding companies by themselves — the credit crisis effectively doomed the stand-alone investment bank model.
Last week, Bank of America said the combination of the two firms’ U.S. equity research platforms is to avoid duplication of coverage and eliminate client confusion of potentially having two different investment opinions on an equity security.
Given the state of the economy and as the recession deepens, many analysts have said such layoffs are expected and more are likely to continue industrywide as the markets and Wall Street look to regain solid footing.