Bank of America Corp, newly merged with FleetBoston Financial Corp, said Monday it will cut 12,500 jobs -- or nearly 7 percent of its workforce -- over the next two years.
Approximately 30 percent of the cuts will come through attrition, the Charlotte-based bank said, with the remaining jobs -- about 8,750 -- being eliminated through layoffs and vacancies that won't be filled.
The cuts will begin this month, as the company starts to notify affected employees from its combined workforce of 181,000.
Several workers leaving Bank of America's headquarters in downtown Charlotte Monday afternoon were not aware of the company's plans. Loan officer Veronica Dawkins said she had not received any word from the company.
"There's been a lot of talk around the office, but no one has given me any indication whatsoever that I need to worry," Dawkins said. "I'm hoping it works out for everybody."
The completion last week of Bank of America's merger with Fleet created the No. 3 bank in the US with assets estimated at US$966 billion.
With about 5,700 branches, the new bank's footprint reaches from California through the South and up to New England. In assets, the bank trails only Citigroup and another planned megamerger between Chicago-based Bank One and J.P. Morgan Chase.
Spokeswoman Eloise Hale said the bank would not specify where positions would be eliminated, saying only that they will take place "corporation-wide."
"When we discuss job reductions, we are talking about positions not necessarily people," said Marc Oken, transition executive for Bank of America. "As a large employer, we will continue to create jobs over time. These are difficult decisions and we are committed to supporting our associates during this time."
Bank of America chief executive Ken Lewis has said he wants to achieve about US$1.6 billion in cost savings by the end of next year. The two banks don't have a large number of overlapping branches that can be closed, which is a major source of savings in many bank mergers.
Instead, the bank has said that it expects to get about US$650 million in savings from trimming overlapping operations and pro-cesses. For example, the bank will be able to consolidate headquarters for combined business lines, Lewis has said.
As part of its merger agreement, the company committed to maintain overall employment levels in the New England states in the northeast.
Bank of America said it will attempt to find new opportunities within the bank for workers affected by the eliminated positions. According to the bank, it filled more than 37,000 positions last year through a combination of internal transfers and external hires.
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