Hire Wire Oct 18 2011

Pink Slips at Bank of America Number 2,000 (So Far)

By Julie Steinberg

Bank of America Merrill Lynch said in its third quarter earnings statement that it told 2,000 employees they will be let go as part of the firm's cost-cutting plans.

The plan to reduce costs, dubbed Project New BAC by senior management, seeks to save $5 billion in annual expenses by 2014. Including layoffs and hires, the bank's total staff numbered 288,739 at the end of the third quarter, a net increase of 655 employees.

Headcount was cut in trading and investment banking, Chief Executive Brian Moynihan said on a conference call after the earnings were released. The bank added 1,700 people in its mortgage and defaulted loans servicing department, 475 financial advisors, 176 financial solutions advisors and 146 small business bankers. It didn't break out further hires.

"During the quarter we've reduced headcount in trading and investment banking around the world and in the U.S.," Moynihan said. The firm will continue to lay off during the second phase of Project New BAC and target costs in commercial banking and global wealth management, he said.

Although it's cutting expenses in wealth management, Moynihan said the firm would continue to hire financial advisors as well as small business bankers. Those businesses "have generated significant revenue growth." "We're going to push forward in those areas," he said.

The retail branch network will shrink further. BofA closed 27 branches in the third quarter as part of its plan to close 10% of its 5,742 banking centers.

The firm set aside an average $97,666 per person in the first nine months of 2011, compared to the $91,544 it averaged in the year earlier period.

The bank posted a profit of $6.23 billion, or $0.56 a share. A year earlier it reported a net loss of $7.3 billion, or $0.77 a share. Analysts had expected $0.28 a share. Revenue rose to 28.7 billion in the third quarter, up 6% from a year earlier.

Write to Julie Steinberg at Julie.Steinberg@dowjones.com

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