Bank of America Chief Executive Officer Ken Lewis may downsize up to 11,000 employees as part of cost-cutting measures aimed at trimming $1.1 billion in after-tax expenses after its merger with FleetBoston Financial, BizJournal reported. Both companies have a combined payroll of 181,000 employees.
Gerard Cassidy, an analyst with RBC Capital Markets, said BoA is also looking to consolidate both firms separate mutual fund operations by merging investment groups and possibly combining portfolios with similar investment objectives. "The overlap areas are the corporate headquarters and then investment management, so there should be opportunities to reduce head count in the investment management area, assuming they consolidate all the investment management functions," he said.
Cassidy also predicts similar cuts in legal, advertising and advertising departments that overlap since the merger. "You don't need another advertising department in Boston, you don't need a second accounting department, you don't need a second personnel department," he says. "That's where I think a large portion of the cuts will come. It's going to be thousands, easy."
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.