Financial giant Bank of America is eliminating 3,500 more employees. With this addition to the 2,500 already lost this year, the score is up to 6,000. The bank is trimming the workforce to sell of businesses, like global credit cards and life insurance portfolios. The company’s profits overall aren’t growing fast enough, particularly due to not enough demand for loans, and the lack of excessive revenues is leading the bank to cut expenses.
Bank of America is selling its Canadian credit card business to TD Bank, and will unload its credit card businesses in the United Kingdom and Ireland, as well. Selling these businesses as well as the life insurance portfolios will help raise capital to deal with a lawsuit. Earlier this year, AIG sued Bank of America for mortgage securities fraud. With the cash gained from the sale of these businesses, Bank of America should be able to afford the judgment, assuming the banks settle. Bank of America is also involved in its own class action lawsuit about overdraft fees.
The latest 3,500 terminations may not be the end of the bad news. The Wall Street Journal reports that the final number of jobs lost this year might be closer to 10,000 rather than today’s total of 6,000. Many employees have already been informed of their personal impact, but others will not be asked to pack their desks until later this year.
Updated October 9, 2016 and originally published August 19, 2011.