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By Hugh Son
By Hugh Son
NEW YORK - Bank of America Corp. is cutting jobs today across co-Chief Operating Officer Thomas Montag’s global trading and investment banking divisions, according to three people with direct knowledge of the decision.
The dismissals at the second-biggest U.S. bank will affect fewer than 5 percent of employees in the units, said one of the people, who requested anonymity because the moves haven’t been made public. Volunteers were sought to accept job cuts, the people said. Kerrie McHugh, a spokeswoman for Charlotte, N.C.-based Bank of America, said the company had no comment.
Banks have been cutting workers for the past five years and still haven’t settled on the right workforce size amid stagnant revenue and tougher regulation. JPMorgan Chase & Co. and Citigroup Inc. warned investors that trading revenue so far in the first quarter, when firms typically earn the most from that business, was down about 15 percent.
“Wall Street may be in the seventh inning of what it is going to be post-crisis,” said Richard Lipstein, managing director of New York-based recruiting firm Gilbert Tweed International. “This is an ongoing process that occasionally results in a material number of layoffs. In fixed income, they’re looking at a shrinking business and figuring out how to match expenses and headcount with revenue.”
The banks are pruning employees and making selective hires this month in hopes of improving profits. Revenue from trading and investment banking at the nine biggest global firms fell 4 percent to $160 billion in 2013, as weakness in fixed-income outweighed gains in equity trading and fees from advising and underwriting.