Business

More employees hit the sack
by Claudia Sonea

The Bank of America, the nation's second largest bank, after on 18 October at the third-quarter report revealed a 32 percent profit drop, decides to cut back losses. Obviously, the first ones that suffer are the employees because they will hit the sack, they represent the sinking fund. Therefore on Wednesday it announced 3000 will be eliminated, representing less than 2 percent of the bank's staff. The CEO Kenneth Lewis laid the entire fault on the bank's problems and traders' faults. Because Charlotte-based bank reported that profits declined from $5.42 billion to 3.7 billion, it will go through a strategic overview of the investment banking affairs. Gene Taylor, head of Global Corporate and Investment Banking, was one of the fortunate 3000 who will hit the sack; he will retire after working 30 years for the bank and let Brian Moynihan, who ran the company's Global Wealth and Investment Management business to give it a try. Although the firings don't represent a big percent of the total number of employees, it will take place at all levels, but mostly in the banking area, business lending, treasury services, and capital markets and advisory services. An example that no one is immune to the cutting of jobs, Chris Hentemann, head of Bank of America's global structured products unit was fired last week. Due to the fact that products like mortgage-backed and asset-backed securities and related trading, especially subprime mortgage, had a very big losses this summer, Hentemann was the escaping goat, even though it was a problem at global level, caused by rising defaults and foreclosures discouraged investors. The layoffs are something habitual for the bank especially under Lewis leadership since 2001. Therefore in 2004 it registered a record of 12500 cut positions due to the FleetBoston Financial acquisition. Also the restructuring that followed added another 4500 firings. When it acquired in 2006 credit card issuer MBNA Corp. the bank cut 6000 jobs, while at the purchase of LaSalle Bank Corp. it plans a 4000 jobs elimination. The 30 cents drop in the share price of Bank of America it's not surprising due to the fact that most of the banks registered losses: Charlotte-based Wachovia Corp., which saw its third-quarter profit fall 10 percent; Citigroup Inc., the nation's largest bank, third-quarter profit fell 57 percent to $2.38 billion, etc. This piece of news is bad not only for those that are now unemployed, but also for the entire economy that is still shaking as a consequence of the high oil prices, unstable stock market and inflation. Stay connected…more to come.

related story: http://news.yahoo.com/s/ap/20071024/ap_on_bi_ge/bank_of_america_job_cuts;_ylt=AgOeWBhCEMRLr7tvR3u5VNis0NUE

by Claudia Sonea for PocketNews (http://pocketnews.tv)

PocketNews is a new real-time news broadcaster delivering the latest and hottest news right to your pocket ! With global clients who want to be kept up to date, PocketNews is everyone's way of keeping in touch with the World.

posted by Blog TechSource @ 5:41 PM