The Wall Street Journal reports this morning that Bank of America will be making another 2,000 redundancies soon in its investment banking, commercial banking and non-US wealth-management units.
Given that Bank of America has been highlighting forthcoming redundancies as part of ‘Project New Bac phase two’ for some time, this doesn’t seem big news. Except the Wall Street Journal reports that the next 2,000 redundancies will be in addition to the 30,000 announced last year and are part of an effort by Brian Moynihan to show he’s a big man when it comes to cuts.
So who’s at risk?
Bruce Thompson, CFO, gave a few pointers during the bank’s recent quarterly conference call. Fundamentally, you don’t want to be doing anything pointless or that someone else is doing somewhere else.
“New BAC relates to simplification,” said Bruce. “It relates to getting rid of work that doesn’t need to be done, and it relates to becoming more efficient.”
Who’s not at risk?
Self-evidently, anyone doing anything significant and efficient. Also, we suspect anyone friendly with, or recently hired by, Tom Montag – who remains flavour of the month after sustaining sales and trading revenues with lower VaR in the first quarter. Also: anyone within rates, or currencies, commodities sales and trading, all of which had a good start to the year.
Equities professionals look a little more precarious. So do Bank of America’s M&A bankers and equity capital markets professionals: revenues in ECM and M&A fell more than 33% year-on-year in the first quarter. Junior M&A bankers seem especially exposed: the Wall Street Journal points out that Bank of America is trying to save money by pooling them in broad sector teams rather than restricting them to sector specialisations, and then allocating them where they’re most needed.
Notably, Bank of America has been making a few trims in sales and trading already: it cut 7 registered persons in London at Banc of America Securities during March.