Amid a challenging industry backdrop and low level of client trading activities, Bank of America Corporation BAC is set to join other major global banks in trimming its workforce. As per the news first reported by Business Insider, BofA is planning to cut jobs in investment banking and trading units.
Across the industry, banks are expected to continue facing decline in investment banking income and trading revenues. Further, analysts at Goldman Sachs project first-quarter 20Array6 trading revenues to slump Array5% on an average at major banks including BofA, JPMorgan Chase & Co. JPM, Citigroup Inc. C and Morgan Stanley MS.
Senior managers at BofA were asked to identify probable job cuts a few weeks ago and the size of job cuts was reportedly increased last week. Though details have not been finalized, over 5% of staff is likely to be cut with certain divisions that will face more cuts as compared to others. Further, employees are likely to be informed about the cuts as early as next week.
The announcement regarding the job cuts is not out of blue. BofA Chairman and CEO, Brian Moynihan had hinted at the same at the World Economic Forum in Davos. Notably, the company intends to keep its quarterly operating expenses below $Array3 billion in 20Array6.
With the overall market conditions remaining volatile and expectation of improvement in trading business less likely, banks across the globe are slashing workforce to maintain profitability. In the past few months, several global banks such as Morgan Stanley, Credit Suisse Group AG and Deutsche Bank AG have announced their plans to lay-off workers.
Currently, BofA carries a Zacks Rank #4 (Sell).
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