According to Bloomberg, Bank of America Corp. (BAC) will retrench 60 employees in its equity sales and trading unit. The decision was taken to boost revenue in the unit by lowering expenses.
The division, comprising approximately 2,500 people, plans to fire least-productive employees globally. BofA also announced jobs cut of approximately 100 employees in its consumer and small business banking unit as of March 2011. The layoffs are part of BofA's ongoing efforts to overhaul its consumer banking unit.
Further, another mega bank, Wells Fargo & Company (WFC) has cut 49 jobs in its financial card collections department in Sioux Falls. In January 2011, Wells Fargo also announced to reduce 120 workers in its student loan operations, including many in Sioux Falls, though the company planned to transfer most of the employees to other units.
In March 2011,Wells Fargo also announced that it will lay off approximately 200 employees, including 82 employees in San Antonio, 30 in Addison and 67 in Bedford, Texas in its home mortgage division.Wells Fargo employs about 13,000 people in metro Des Moines. The company’s Home Mortgage division, which is based in West Des Moines, captures approximately 25% of the U.S. home lending market.Wells Fargo also announced the elimination of 68 positions at a Vancouver call center, which supports collection of loans for Wells Fargo Financial division, the company’s consumer finance subsidiary. The action followed as the customers are paying down debt, eliminating the need for debt collectors.
Many large Wall Street banks have started reducing their workforces to cut costs following the slowdown in economic and market activity. Further, some large Wall Street banks are laying off employees due to weak trading volumes and stringent regulations on some parts of their business.
On Wednesday, The Goldman Sachs Group Inc. (GS) also stated its intention to lay off 230 workers in New York State due to economic reasons. The layoffs will be executed during the fourth quarter of 2011 and the first quarter of 2012.
Goldman's New York layoffs represent less than 1% of its 35,400 employees as of March 2011. The layoffs would be in addition to the company's annual retrenching of workers, who perform in the bottom 5% or so. However, Goldman is also hiring employees in China, India and Brazil following growth in such markets.
Credit Suisse Group AG (CS) is among the other Wall Street banks that are planning to reduce cost by retrenching employees as they are struggling with reduced revenue from trading stocks and bonds. Further, according to a regulatory filing, Bank of New York Mellon Corp. (BK) also informed the labor department about its plans of cutting 124 jobs in its treasury services operations lockbox. The jobs cut will take place in segments beginning July 1, 2011 and continue through March 31, 2012.
We believe that the present job cuts will enable banks to reduce expenses, alleviating bottom-line pressure.
Both Wells Fargo and BofA currently retain Zacks #3 Rank, which translates into a short-term ‘Hold’ rating.
BANK OF AMER CP (BAC): Free Stock Analysis Report
BANK OF NY MELL (BK): Free Stock Analysis Report
CREDIT SUISSE (CS): Free Stock Analysis Report
GOLDMAN SACHS (GS): Free Stock Analysis Report
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