Bank of America on Wednesday said it plans to eliminate 3,000 jobs, and that the head of corporate and investment banking will depart after a dismal quarter at that unit led to a 32 percent drop in overall profit.
The second-largest U.S. bank said a majority of the job cuts will be in corporate and investment banking, and the rest elsewhere. These cuts amount to less than 2 percent of the company's overall workforce.
Cutbacks were widely expected after a $1.46 billion trading loss led to a 93 percent decline in quarterly earnings from corporate and investment banking.
The trading loss limited overall profit to $3.7 billion, or 82 cents per share. Excluding items, profit was 84 cents per share, 22 cents below the average analyst forecast.
Gene Taylor, a 38-year veteran of Bank of America, will retire at year end as president of global corporate and investment banking, to be replaced by Brian Moynihan, now head of wealth and investment management, the bank said.
Charlotte, North Carolina-based Bank of America also said it has launched a strategic review of corporate and investment banking to determine how the unit can operate better.
"While some of these changes are a direct result of our underperformance, others have been contemplated for a number of months," Chief Executive Kenneth Lewis said in a statement.
"The vast majority of our company is performing quite well," he continued. "However, we recognize that there are areas where we need to improve ... We must have a platform that operates profitably for both our company and our clients."
On Oct. 18, when discussing quarterly results, Lewis' displeasure was evident as he told analysts: "I've had all of the fun I can stand in investment banking at the moment."
The 48-year-old Moynihan is the bank's most senior executive from the former
FleetBoston Financial, which Bank of America acquired in 2004.