San Francisco, CA –
Bank of America, the nation’s largest bank, said it will be cutting 40,000 jobs, or 1 in 6 of their total employees, in an effort to cut costs and survive a crushing amount of toxic mortgages it has had to buy back, having already depleted most of its reserves.
The Bank of Italy, as it was originally known, is also cutting numerous consumer banking branches across the country, and slimming down its mortgage loan centers. Adding to its plight, BofA has significant exposure to the European debt market and the ensuing financial crisis unfolding across the Atlantic.
BofA has already exhausted over $20 billion in reserves and now is below the minimum reserves required by the government. It has previously announced the sale of assets to recoup the required reserves. The new layoffs are expected to save the ailing bank an estimated $300 million a year. Closing many of its branches are expected to save an extra $150 million a year, and selling off some of its assets should bring in around $200 million.
But that’s not enough, and BofA will retrace its old footsteps of charging consumers for nearly everything under the sun, for the privilege of having a debit card, to how many times you can see a teller or call customer service in a month. 12 years ago the bank used to allow no more than 3 teller visits or customer service calls per month without being hit with a fee. The bank is also bringing back monthly account service fees, in other words, they are going to charge you to use your own money.
Most of the consumer banking branches to be closed are in California, but the job cuts will be spread across the nation.
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