Bank of America Corporation
), the second largest U.S. lender by assets, is set to reduce its
workforce in order to achieve greater efficiency. BofA is
contemplating nearly 411 layoffs in its troubled mortgage
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The layoffs are a part of the company's Project New BAC, which
aims at revamping the overall business scenario at BofA. Under
this initiative, the company plans to cut nearly $8 billion in
annual costs and 30,000 jobs. Therefore, in order to achieve its
target, BofA has planned to eliminate 324 jobs in Richardson and
87 jobs in Dallas. However, the laid off employees will be
provided career-transition resources along with severance pay and
The mortgage servicing unit, which was initiated in 2011 to
service delinquent and risky mortgages, suffered a setback due to
the decline in loan portfolios triggered by the financial crisis.
Owing to this, the loan portfolios decreased from 1.6 million to
667,000. This lessened the demand for workforce as fewer
employees were required to service those accounts.
Earlier in Apr 2013, BofA closed its mortgage servicing office
near Buffalo, N.Y, which resulted nearly 1,320 job cuts in that
unit. It also eliminated about 469 jobs in Newark, N.J.
BofA previously eliminated jobs in the last two quarters. It
slashed nearly 4,378 jobs in the first quarter of 2013 and around
5,400 jobs in the fourth quarter of 2012. The company had 262,812
employees as of Mar 31, 2013, a decline of 5.7% from the year-ago
The job cuts do not come as a surprise since many other global
firms have resorted to the same strategy over the last few years.
The ongoing economic crisis, market instability and weakening
revenue resources have prompted the company to downsize its
operations and reduce workforce in order to improve its overall
Other companies that have resorted to job eliminations over the
past several quarters include
JPMorgan Chase & Co
BofA currently carries a Zacks Rank #3 (Hold).