Bank of America to shed up to 35,000 jobs

The Bank of America expects to shed 30,000 to 35,000 jobs over the next three years, as it faces a deteriorating economic environment and tries to absorb Merrill Lynch.

But the final number of jobs cut from the US banking giant could be even higher, analysts say.

Bank of America, based in Charlotte, North Carolina, said it would not complete its analysis for eliminating positions until early next year. The company and Merrill have about 308,000 employees in total, and the cuts will affect workers from both companies and all types of businesses.

The bank employs less than 100 staff in Ireland. It was not specified how its Irish operations, based in Dublin's IFSC, would be affected.

Bank of America is considered one of America’s healthier banks, and its decision to slash so many jobs illustrates the breadth of the redundancies hitting the United States.

The nation lost more than half a million jobs in November alone, and economists expect many more to come.

Last night’s announcement of job cuts at Bank of America was hardly unexpected, considering the merger and the wave of job losses seen in the banking industry and in other sectors over the past few months. Bank of America and Merrill Lynch have already eliminated thousands of investment banking jobs over the past year, as have other banks, in an effort to lower costs as they face increasing defaults in mortgages, credit card debt and other loans.

Other big banks – which have all received loans from the US government’s bail-out fund – have been cutting jobs as well.

New York-based Citigroup has been slashing jobs the most. By next year, Citigroup expects to have shrunk its workforce by 75,000, or 20%, since its headcount peaked in late 2007.

JPMorgan Chase is shedding about 7,000 employees, or 10%, of its investment bank staff, and cutting 9,200 jobs at Washington Mutual, the bank it acquired in September. Goldman Sachs and Morgan Stanley, meanwhile, are reducing their staff by about 10%.

The massive layoffs have raised questions about executive pay – CEOs at Citigroup, JPMorgan Chase and Bank of America have yet to reveal whether they will receive bonuses this year, but those at Merrill, Morgan Stanley and Goldman have announced that they will forgo them.

Some argue, though, that the shotgun deal between Bank of America and Merrill, valued at $50bn (€37bn) when it was initially announced in September, may have saved jobs in the end. It was struck as the solvency of investment banks was in grave doubt and kept Merrill from a complete meltdown like the one suffered by Lehman Brothers Holdings, which was forced to file for bankruptcy.

Shareholders of both companies voted to approve the deal last week and it is expected to close by January 1.