Updated 09/20/2012 09:37 PM
BofA to accelerate layoffs as part of cost-cutting effort
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CHARLOTTE - Bank of America will lay off 16,000 people between now and the end of the year, according to a report in the Wall Street Journal.
The reductions are part of 30,000 job cuts planned as a cost-cutting program known as Project New BAC.
"The only surprise is that it's coming a little sooner rather than later," said Harry Bowen, a business professor at Queens University of Charlotte.
Bank of America will eliminate more than 5,000 jobs in consumer banking and 3,200 positions in mortgage origination, the newspaper says, as the company pivots to business lines that are more profitable.
“So they kind of got caught holding all of these people and assets in a business activity they felt was no longer the right direction," said Bowen.
A company spokeswoman refused to comment.
These cuts are part of an effort to eliminate $8 billion in operating expenses by mid-2015. Bowen said the acceleration is a good thing.
"I take it as a positive sign that the bank has been able to trim and reorganize itself."
As part of the cost-cutting program, Bank of America will close about 200 branches this year, the journal reports. But new mobile banking applications and other programs could minimize the impact to consumers.
“Increasingly technology has made the idea of branches something that is just to be rationalized," said Bowen.
Experts say despite the fact that Bank of America is headquartered in Charlotte, the job cuts shouldn't deal a big blow to North Carolina.
"It just means that you might have to go an extra half mile to get to a branch that remains open," Bowen said.
Bank of America will release its third quarter earnings report next month, which could give new insight into the company's restructuring program.