CHARLOTTE -- Bank of America Corp. late Wednesday said it would eliminate 3,000 jobs throughout the company and replace its head of corporate and investment banking after last week's dismal third-quarter earnings report.
The bank also said it would launch a "strategic review" of the investment banking unit, which provides Wall Street-style services such as stock and bond offerings, to "determine how it can operate more effectively while continuing to meet client financial needs."
The Charlotte bank said that Bank of America veteran and vice chairman Gene Taylor would retire at year's end after a 38-year career with the bank. He will be succeeded by wealth management head Brian Moynihan, who joined the company with the 2004 acquisition of FleetBoston Financial Corp.
The job cuts, which the company said come "in light of market conditions and strategic imperatives," are throughout the bank but the majority are investment banking-related in areas such as business lending, treasury services and capital markets and advisory services as well as support staff. Investment banking is largely based in New York but has a Charlotte presence.
The company would not disclose reductions by location, but spokesman Bob Stickler said no city is losing more than 150 jobs. Charlotte, which has about 15,000 Bank of America employees, was not the hardest hit location, he added.
The reductions amount to less than 2 percent of the company's total 198,000 employees. The layoffs are among the larger at the bank under chairman and chief executive Ken Lewis, who took the helm in 2001. The bank cut 12,500 positions in the Fleet merger and an additional 4,500 in a follow-on restructuring. Lewis also cut about 6,000 in his MBNA acquisition and plans to eliminate 4,000 jobs in this year's LaSalle bank deal.
"While some of these changes are a direct result of our underperformance, others have been contemplated for a number of months as we looked at how we could operate more effectively," Lewis said in a statement. "I want to emphasize that the vast majority of our company is performing quite well and we continue to invest in a number of those businesses to support future growth. However, we recognize that there are areas where we need to improve and are moving decisively toward that goal."
Lewis said last week that he was reassessing the corporate and investment bank after it helped depress overall third-quarter earnings by 32 percent. Most major banks, including Charlotte's Wachovia Corp., reported a tough third quarter.
Taylor took over the unit in 2005 when mid-sized lending was melded with investment banking. Since late 2004, Bank of America has spent $675 million to hire more traders, salespeople and bankers as part of an ambitious expansion effort that was launched under Al de Molina, who became the bank's chief financial officer before leaving in late 2006.
On Friday, Chris Hentemann, who was in charge of products such as mortgage-backed and asset-backed securities, left the bank. These investments, which are based on underlying mortgages and other assets, plummeted in value this summer during a global credit crunch sparked by defaults in loans to borrowers with spotty credit.
Moynihan, 48, will be replaced by Keith Banks, who is currently head of the bank's Columbia Management asset management arm, which includes mutual funds. The bank said his replacement would be named soon.
Bank of America said last week that profits in corporate and investment banking fell 93 percent to $100 million from $1.4 billion last year.