Bank of America to cut 3,500 jobs

Posted Aug. 19, 2011, at 6 p.m.

NEW YORK — Bank of America Corp., the nation’s largest bank, said Friday that it plans to cut 3,500 jobs by the end of September.

The cuts amount to a little more than 1 percent of the bank’s work force of roughly 288,000. But they follow a string of other layoffs, including 2,500 already announced this year.

T.J. Crawford, Northeast spokesman for Bank of America, said the company was not providing information regarding geographic areas or specific business lines affected by the cuts.

The job cuts were across most lines of business the bank operates, he said, and the company has begun notifying employees who would be let go.

Crawford said the bank had “hundreds” of employees at each of three call centers in Maine, in Belfast, Brunswick and Orono — all former MBNA call centers. He also said the company had 33 banking centers in Maine, though he wouldn’t disclose how many employees work in them.

After this round of layoffs, the bank should have about 284,000 employees. Its roster peaked in early 2009, right after it absorbed investment bank Merrill Lynch and mortgage lender Countrywide Financial, at about 302,000.

The entire banking industry is shrinking as new regulations and the fallout of the financial crisis force it to become smaller, simpler and less profitable. Many of the complicated investment vehicles that fueled the industry before 2008 are gone after being blamed for causing the financial crisis.

U.S. banks employ about 2.09 million people, down from 2.21 million people in early 2008, according to data compiled by the Federal Deposit Insurance Corp.

Like other industries, banking always has ebbed and flowed with the markets. It started laying off investment bankers as the economy began to sputter in 2007. It laid off workers again in 2008 and 2009 as the financial crisis sent many banks into the red and forced them to take government bailouts. But 2010 provided some relief, with shares bouncing back and banks making profits, and banks even hired back some workers.

But now banks are cutting jobs again. Bank of New York Mellon Corp., Goldman Sachs Group Inc. and State Street Corp., among others, recently have announced layoffs.

This latest round is different because it’s coming at a time when many banks actually are posting improved profits. Analysts say the latest cuts point to permanent structural changes, not temporary market problems.

Investors are worried about banks’ exposure to continued problems over soured mortgages and mortgage-backed securities. Though the banks’ capital cushions are higher and many are turning profits, it’s not known how much they could have to pay to investors who claim they were misled into buying the securities.

Bank of America is especially vulnerable, partly because of its fast expansion during the height of the financial crisis: It’s still cleaning up the exotic mortgages of Countrywide, a California-based lender it bought in the summer of 2008. The move propelled the Charlotte bank into the country’s biggest mortgage lender, but it has also brought it lawsuits, regulatory probes and quarterly losses.

Matt Wickenheiser of the Bangor Daily News contributed to this report.

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