Bank of America aims to cut 3,000 jobs, the majority in the investment banking sector, after announcing trading losses of approximately $4 billion.
Job losses had been expected after profits in the investment banking division fell to $100 million and Kenneth Lewis, chief executive officer, blamed the drop on the bank’s mistakes. Analysts, however, have been surprised by the extent of the cuts.
“Ken Lewis was clearly disappointed by the performance and the bank’s risk management. He is moving quickly to boost earnings for next year. These cuts are higher than what I was anticipating,” says Jefferson Harralson, an analyst at KWB inc, speaking to Bloomberg.
The reductions represent under 2% of the total workforce employed by the bank and are set to involved business lending, treasury services, capital markets and advisory service employees.