BofA to cut 650 jobs from corporate, investment banking ranks

will eliminate 650 jobs in its corporate and investment banking division. The Charlotte, N.C.-based bank also will sell its equity prime-brokerage business, which processes trades for hedge funds.
Officials did not immediately respond to inquiries about any possible impact in the Phoenix area.
"These changes will sharpen the focus of our capabilities and activities on the needs of our clients," says Ken Lewis, chief executive. "We should emerge from this realignment with profitable and more competitive global markets and global investment-banking businesses. We're committed to that, and it is important to our success."
BofA (NYSE:BAC) says the realignment will result in revenue and expense reductions. Additional guidance will be provided Jan. 22, when the company is scheduled to report its fourth-quarter and full-year 2007 financial results.
The job cuts follow BofA's decision in October to eliminate 3,000 jobs, or nearly 2 percent of the company's total employment. Some 500 of those layoffs were in global corporate and investment banking.
The bank made that move after reporting third-quarter earnings of 82 cents per share, a 32 percent decrease from the third quarter of 2006.
Continued disruptions in the credit market hit BofA especially hard in its global corporate and investment banking unit, where third-quarter net income fell to $100 million, a 93 percent drop from $1.43 billion a year ago.
In the aftermath, BofA began shuffling senior executives in a broad reorganization plan. As part of those moves, Brian Moynihan was named president of global corporate investment banking. Moynihan succeeded former GCIB President Gene Taylor, who retired after 38 years.
Along with the layoffs, the reorganization includes reduced activities in certain structured products, including collateralized debt obligations, and an emphasis on core strengths in debt, cash management and trading.