Bank of America Corp., making good on a vow to curtail investment banking after the unit's profit plunged 93 percent, put a new manager in charge and announced 3,000 job cuts.
Brian Moynihan, head of wealth management at the Charlotte, North Carolina-based company, will succeed Gene Taylor as head of the 20,000-person division, according to a statement Wednesday. Most of the jobs will be cut from the investment bank, spokesman Robert Stickler said in an interview.
Chief Executive Officer Kenneth Lewis said Oct. 18 he would scale back the investment bank following about $4 billion of trading losses, defaults and writedowns in the third quarter. Lewis, who blamed the losses mostly on the bank's own mistakes, promised to weed out units that post four or five annual profits "and then give it all back in one year."
"These cuts are higher than what I was anticipating," Jefferson Harralson, an analyst in Atlanta at KBW Inc., said in an interview. "Ken Lewis was clearly disappointed by the performance and the bank's risk management. He is moving quickly to boost earnings for next year."
The reductions are less than 2 percent of the total workforce and involve business lending, treasury services, capital markets and advisory service employees, the bank said. Bank of America fell 30 cents to $47.48 in New York Stock Exchange composite trading yesterday. The shares have lost 11 percent this year. Third-quarter profit fell 32 percent to $3.7 billion, the bank said last week.
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Brian Moynihan, head of wealth management at the Charlotte, North Carolina-based company, will succeed Gene Taylor as head of the 20,000-person division, according to a statement Wednesday. Most of the jobs will be cut from the investment bank, spokesman Robert Stickler said in an interview.
