Business

Analysts: BofA could cut 30,000 positions

CHARLOTTE -- Bank of America chief executive Ken Lewis said Wednesday the Charlotte bank is in the "final stage of our analysis" for planned job reductions in its Merrill Lynch purchase.

"We'll have something pretty soon," he said. A spokesman put it at "early in 2009."

Lewis declined to comment on a CNBC report that said the bank could eliminate 30,000 jobs in the deal to cut costs. It's almost certain that Bank of America's takeover of Merrill Lynch will result in job cuts at both companies, but there are few details so far for nervous workers.

Earlier in the week, CNBC reported that 10,000 job cuts were expected, citing unnamed sources.

Bank of America plans to trim $7 billion, or 10 percent of the combined company's annual expenses, by 2012. Some analysts have said this means that 10 percent of workers could lose their jobs. Bank of America has about 247,000 employees, and Merrill has about 61,000.

Joe Price, Bank of America's chief financial officer, has said the bank would achieve some of the savings by negotiating better deals with vendors and combining office space. He expected headcount reductions at both companies, particularly in back-office and support functions and overlapping roles. "We do intend to be very aggressive on the cost side," Price said when the deal was announced in September.

Bank of America's brokerage unit could be particularly vulnerable, some analysts say. Merrill's famous "thundering herd" of almost 17,000 financial advisers is a main driver in the decision to buy Merrill. Bank of America's own brokerage unit, with about 2,000 advisers, "is not anywhere near as well positioned," said Alois Pirker, an analyst at the Aite Group.

John Thain, Merrill's CEO, will lead the combined wealth management and investment banking units. He will continue to be based in New York. His appointment signals that Bank of America intends to keep the Merrill style intact, rather than conform it to its own image. Thain said last month he expects "thousands" of job losses from the takeover.

This week, bank spokesman Scott Silvestri said the bank is evaluating staffing levels, "given both the pending merger with Merrill Lynch and the weak economic environment which is affecting the level of business activity."

Bank of America has about 15,000 Charlotte employees, making it the area's third-largest employer behind Carolinas HealthCare and Wachovia.

Shareholders of Bank of America and Merrill are expected to approve proposed merger on Friday.

  Comments