NEW YORK -- Bank of America is slashing 30,000 jobs as part of an effort to reverse a crisis of confidence among investors. It's the largest single job reduction by a U.S. company this year.
What CEO Brian Moynihan is trying to do is nothing less than save the nation's largest bank, which is one of the largest financial institutions in South Carolina and the greater Charleston region. Investors have cut the bank's market value by half this year. The bank is facing huge liabilities over soured mortgage investments and concerns over whether it has enough capital to withstand more financial shocks.
The cuts, which affect Bank of America's consumer businesses, represent 10 percent of the Charlotte-based bank's work force. The impact among the company's Charleston employees was unclear Monday.
"We are not providing any geographic breakdowns at this time," a spokeswoman said.
The bank said it hopes the cuts and other measures will result in $5 billion in annual savings by 2014. The bank has already cut 6,000 jobs this year. The bank also said it would look for cost savings at its other businesses in a six-month review that will begin next month.
"It's as if someone has hit the panic button," said Bert Ely, president of banking consultant Ely & Co.
Moynihan has been taking other steps to shore up the bank's standing. Last week he shook up the bank's top management ranks and has been selling parts of the company to raise cash. Last month Warren Buffett's Berkshire Hathaway Inc. invested $5 billion in the company.
Moynihan has struggled to calm investors ever since he took over in January 2010. He is reversing the empire-building strategy of his predecessor, Ken Lewis, who stepped down amid controversy over the purchase of Merrill Lynch during the financial crisis.
Moynihan is now taking a knife to the company, hoping to shrink it down to a more manageable size even if it means losing the bragging rights of being the nation's largest bank.