Bank of America will cut roughly 3,000 jobs by the end of the year as the number of refinancing applications and troubled loans has fallen.
It is part of larger industry pull back in response to the changing housing market.
The second largest US bank laid off 1,200 employees this week, primarily from a unit that handles mortgage origination, company spokesman Terry Francisco said. He said the move is a response to a “significant” drop in refinancing application that has been happening since the middle of this year.
Bank of America plans to make the bulk of the remaining reductions in its unit that handles troubled mortgages, such as foreclosures or loan modifications, as an economic recovery has eased the number of borrowers in distress. Francisco said many of the cuts affect contractors who were hired during peak demand.
The company has been cutting jobs since CEO Brian Moynihan took over in early 2010 as part of a broader strategy to make the bank easier to manage and to reduce exposure to riskier businesses.
Its total full-time employee base has shrunk to 247,943 full-time employees as of the end of its most recent quarter, down 9 percent from 272,594 at the same time last year. This includes a number of recent reductions in the same distressed borrower unit that faces cuts just ahead.
Yet the banking job cuts go beyond Banks of America.
The economic recovery has lessened the number of troubled mortgages nationwide. Meanwhile, the improved economy and lower interest rates boosted demand for this spring and summer’s home buying season. But that activity, along with refinancing, is slowing as interest rates rise.
A number of lenders are slashing jobs in response to the changing market.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.