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Bank of America to cut 3,500 jobs

Published: 15:07 19 Aug 2011 EDT

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Bank of America (BAC) (NYSE:BAC) plans to cut 3,500 jobs by September, according to reports, on top of the 2,500 job losses seen earlier in the year.

An internal memo obtained by Reuters announced the cuts to employees on Thursday. Speaking with the Boston Globe, spokesman Scott Silvestri confirmed that the headcount reduction will occur "across most of the lines of business."

Other reports claim that up to 10,000 employees could be out of work by the end of the year.

The biggest bank in the U.S. has seen expenses continue to rise, pushing it into losses in the last three of five quarters, including an $8.8 billion loss in the latest second quarter.

Mortgage loans have been a big source of problems for the bank, who recently agreed on an $8.5 billion settlement to cover 530 toxic residential mortgage-backed securities that mortgage lender Countrywide Financial issued between 2004 and 2008 to several investors. Bank of America, whose loan portfolio has approximately $1.0 trillion in unpaid balances, acquired Countrywide in 2008.

The Charlotte, North Carolina-based bank also expects to record an additional $5.5 billion in provisions for both Government-Sponsored Enterprises (GSE) and non-GSE exposures.

The bank has also made settlement agreements with Fannie Mae and Freddie Mac, and Assured Guaranty Ltd, in the past six months, each related to mortgage-based claims made against Countrywide.

In a bid to raise cash, it has been selling off assets. Earlier this month, the bank sold its Canadian credit card business to TD Bank.

It also sold it Spanish credit card business to Apollo Capital Management, and its $200 million U.K. portfolio of small business credit card loans to Barclays in April.

The bank has said it will cut as much as $1.5 billion in quarterly expenses, largely from reducing its mortgage portfolio, as well as the company's New BAC plan, which will see employees and managers work to transform policies, practices and organizations to better align to the bank's customer-driven strategy.

Bank of America's shares on the New York Stock Exchange, which have shed over 48% this year to date, dropped another 2.35% today, trading at $6.84 per share as of 2:32 pm EDT.

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