Bank of America To Cut 650 Jobs, Sell Brokerage
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Bank of America Corp., the second-largest American bank, plans to cut 650 jobs from its corporate and investment bank and sell the prime brokerage unit that caters to hedge funds.
The bank is slashing its so-called structured products business, which packaged and sold real estate loans to investors, and will reduce investment banking in Europe and America, the chief executive officer of the company, Kenneth Lewis, said in a meeting with reporters today in New York.
Mr. Lewis, who told investors in October he’d had “all the fun I can stand in investment banking” after about $2 billion of writedowns and trading losses, said yesterday the bank is still committed to the unit. Bank of America remains a market leader in syndicated lending and leveraged finance, and the business is important to the company’s success, he said.
“We’ve never been an investment-banking wannabe,” Mr. Lewis said, adding that he regrets his previous comment because it created misperceptions about the unit. “Where we choose to compete, we will win.”
The job cuts, 12% of the unit’s staff, are in addition to previous plans to fire 3,000 people, including 500 in the corporate and investment bank, Mr. Lewis said. The entire company employs about 220,000 people, he said.
