Surprise as Bank of America cuts jobs three days before bonuses
Bank of America is cutting jobs. Headhunters told us yesterday that cuts were coming at the bank, and both Financial News and Reuters are reporting today that people have gone. The cuts are being made on the cusp of bonus announcements, which are due this Friday.
Bank of America declined to comment on the cuts, which are understood to include 20 people in Asia and 'sector and product focused dealmaking teams' in London.
A person familiar with the matter said the cuts are minimal and are part of the annual performance review. While Goldman Sachs and Morgan Stanley made thousands of job cuts last year, Bank of America mostly relied upon the non-replenishment of staff who left to get its numbers down. However, CEO Brian Moynihan said earlier this month that the staff turnover at the bank rate fell to just 6% in the fourth quarter, down from an average of 12%. Although Bank of America had a hypothetical hiring freeze last year, Moynihan said the bank actually hired 15,000 people in 2023, but ended the year down 5,000 people.
It will end the first quarter down a few more. Managing directors who've worked for the bank told us it's unusual for BofA to cut so close to bonuses. "It's brutal, I can't ever remember them cutting this close to bonuses being announced," said one. "- Even in the financial crisis."
"I bet the bonus pool has been reduced at the last minute as well," said another.
Bank of America's sales people and traders had their best year ever in 2023, but its M&A revenues fell 15%. Headhunters forecast yesterday that markets bonuses will be strong. Hiring is still underway there: BofA recently rehired Mitchell Story from Goldman Sachs to head its American index trading desk.
Staff who are cut before bonuses typically do not receive a payout for work the previous year. However, they will receive a severance package.
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