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Saturday, December 9, 2023

BOA to cut 4,000 jobs amid recession worry – Executives


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New York: Bank of America wants to lay off some 4,000 workers by June, despite sterling first quarter profits, as recession worries grip Wall Street, company executives said in a quarterly earnings call.

CEO Brian Moynihan said the cuts were to preempt a cooling job market and should not be interpreted as weakness in the bank’s business.

“The forecast is for a recession in the second half of the year, but we don’t see consumer activity slowing to a pace that indicates that,” the chief executive of the bank, known as BofA by its initials, told analysts on the earnings call Tuesday. “Everything points to a mild recession, but we will see what happens.”

CFO Alastair Borthwick indicated that the personnel reduction, which represent 2% of the bank’s total fulltime workforce, comes after headcount peaked at 218,000 in January.

“We ended the first quarter with a little more than 217,000 people at the company… and we expect by the end of the second quarter, our fulltime equivalent headcount will be roughly 213,000,” Borthwick said on the call.

Borthwick also said the bank’s bottom line will benefit from continued “headcount discipline” and attrition through time.

The bank’s workforce had grown by 4% in the year to March, according to data contained within its earnings announcement.

BofA has also cut more than 1,000 positions in the first two weeks of April and planned to eliminate an additional 3,000 jobs by the end of the quarter. The bank added that it would not replace staff leaving the bank and that these departures accounted for the bulk of the cuts.

Policymakers at the Federal Reserve have projected that the United States will experience a “mild recession” later this year that could take two years to overcome, minutes from the March policy meeting of the US central bank showed.


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