B of A announces 40,000 layoffs

[gunnergoz]

An interesting progression of B of A headlines:

http://blogs.wsj.com/deals/2011/01/31/bank-of-americas-brian-moynihan-lands-905-million-stock-award/

http://www.charlotteobserver.com/2011/03/09/2122943/moynihan-bofa-profits-will-surge.html

http://www.huffingtonpost.com/2011/04/15/bank-of-americas-profits-decline_n_849543.html

http://www.latimes.com/business/la-fi-bank-america-jobs-20110910,0,4275951.story

So let's recap:

1. B of A announces a hefty stock reward package for its CEO Brian Moynihan, on top of his nearly $1 million a year salary;

2. Moynihan grandly predicts great future profits for B of A;

3. B of A's profits said to be gravely in decline;

4. B of A announces it will lay off 40,000 employees.

Of course, this is the same B of A that only two years ago was the subject of this news story:

http://news.bbc.co.uk/2/hi/7832484.stm

Followed closely by this one:

http://www.businessinsider.com/2009/1/75-of-latest-bank-of-america-bailout-paid-merrill-lynch-bonuses-bac

It will be most interesting then to see just how big is Mr. Mynihan's next bonus, after trimming 40,000 employees from B of A's payroll. I'm sure they will reward him handsomely for helping B of A become more streamlined. As a consumer, however, just don't expect quick service at any B of A branch teller any time soon. And if you work(ed) there, good luck...

[JonS]

40,000 x $50,000 salary = savings of $2,000,000,000

Given that it'll be easy-ish to run down services and keep a lid on complaints for a year or so, I expect he'll get a MASSIVE bonus next year, and then jump ship. The poor sucker who comes after him won't be up for much though.

[gunnergoz]

True, but I suspect that most of the layoffs will be low-tier personnel who make far, far less than $50K/annum. Tellers make more like $25K or even less to start. So one could call it a form of trickle-down economics but what is trickling down is not tasty treacle.

[LemoN]

Lovely.

And people wonder why we are in the next financial crisis already.

[Michael Emrys]

And note that those 40,00 aren't likely to be making many big ticket purchases in the foreseeable future either, so there's one more nick in the general economy.

Michael