Bank of America Corp. (NYSE: BAC), the second-largest U.S. bank by assets, will dismiss about 2,000 employees, many of whom earn high salaries, in its investment banking, commercial banking and non-U.S. wealth management units, according to the Wall Street Journal.
The newspaper said on Tuesday that news of the staff cuts at the Charlotte, N.C., company follows last year's announced plan to eliminate 30,000 jobs over three years at Bank of America's consumer banking division. Its top moneymaking operations grew with its 2009 purchase of Merrill Lynch & Co.
Bank of America didn't immediately respond to requests for comment. It employed 278,700 people as of March 31, the Journal reported.
On April 19, the bank reported a first-quarter profit of $653 million, or three cents per share, a 68 percent drop from $2.05 billion, or 17 cents per share, a year earlier. Revenue fell 17 percent.
Excluding charges, the bank earned 31 cents per share while revenue fell 2.8 percent. It reported adjusted earnings of 12 cents per share a year earlier.
CLSA analyst Mike Mayo downgraded Bank of America shares a day after it reported results, to sell from underperform, citing the bank's reduced earnings power and concerns about its mortgage liabilities and lost market share in mortgages and credit cards, Reuters said.
This weak performance begs the question: Would shareholders be better off with a more downsized company, Mayo said in a note to investors.
Shares of Bank of America rose 24 cents, or 3 percent, to $8.35 in midday trading.