As featured in The Wall Street Journal, Money Magazine, and more!

Search: layoffs


After Bank of America investors have endured a year of suffering, Bank of America employees will start to feel the company’s troubles. Although the bank already announced significant layoffs this year, hot on the heels of a $5 billion boost from Warren Buffett, an overdraft fee lawsuit settlement, and a settlement for a lawsuit pertaining to mortgage-backed securities, the CEO of BofA, Brian Moynihan, announced the company will shed 30,000 jobs between October 2011 and December 2012.

For now, Bank of America is the largest bank in the United States. This move is a reflection of the financial industry, which, in turn, is a reflection of the stock market, with financial companies being a strong component of indexes. The stock market is a partial reflection of the broader economy.

Bank of AmericaWhile not currently in a technical recession, this is just another piece of bad news in addition to the economic woes currently affecting us. Some have a more direct effect than others; high unemployment rates hurt the wallet for many families, while the European debt crisis seems to be somewhat removed from Americans’ daily financial experiences. Layoffs at Bank of America will obviously affect families who rely on BofA salaries and benefits, but it is a signal that economic turmoil may be around for longer than we had hoped.

We may be entering a period where companies want to avoid being “too big to fail.” After deregulation and a regulatory culture that permitted financial institutions to grow without restriction, companies wary of the consequences of being so large in an industry that still bears high levels of systemic risk may find it better in the long run to fly low — the “Careful, Icarus” approach to business growth.

So far this year, here’s the timeline for Bank of America job cuts:

I expect more announcements will come as the financial industry continues to struggle to find footing in the post-recession economic environment.

CNN Money

{ 13 comments }

This is a guest article by Revanche, a twenty-something west coast girl who writes about money at A Gai Shan Life.

You’ve all heard that line about not burning professional bridges, right? That goes double or even triple for job interviews. I started my job hunt 20 months ago — as soon as there were doubts that our company was going to remain in California. I was applying and interviewing for jobs for six months but nothing panned out; through the fall and winter of 2008 companies were too nervous, the market was too shaky. Then, just after a particularly grueling set of interviews with my top job choice, the market crashed.

A week shy of March, I got the call: I was their strongest candidate and had made a great impression but they couldn’t make an offer. The economy made them too nervous to take on any new hires, and they were looking to rework their entire organizational structure to avoid mass layoffs. On the one hand, it was terribly disappointing. On the other, it was for the best. I didn’t want to get laid off within months of starting a new job.

My last conversation with the hiring manager was civil, even pleasant. I thanked him for the opportunity, joked with him about his yanking my dream job out from under me, and we agreed to leave the door open for future opportunities. Sure, I was peeved that it took them weeks to get back to me, and peeved that after all that waiting, time and energy, the position never came to fruition. Job hunting’s a pain, and I wanted it over with. But that’s my problem. Aside from the single joke, I never mentioned it again.

My job ended last summer. I’ve been job hunting, networking, traveling, interviewing, and traveling while paying the bills with cobbled together income of unemployment, some freelance gigs, and savings. Although I’ve tried to enjoy as much of the freedom as possible, the shadow of unemployment and career stagnation hung heavy. Having my family to support weighed even more heavily on my mind. (One of the drawbacks of being a responsible personal finance blogger is that you can’t ever really hide from the reality that you’re bleeding money.)

At the end of January, I wandered through that company’s site again and saw they had posted job listings, one of which was almost perfect for me. “Almost” because I wondered deep down if the responsibilities were perhaps a little too great but I squashed that squirt of self doubt and emailed the former hiring manager asking if he was also the HM for this position. He responded quickly in the affirmative: he’d meant to forward the job listing to me and it’d slipped his mind.

Within a week of submitting a cover letter and revamped resume, he contacted me for a phone conversation, not an interview as he already knew my basic qualifications from the previous encounter, and asked me for my interview availability. We agreed on a mutually acceptable date, I had a phone interview with his boss, and then traveled to an in-person interview ten days later. It was around that time that I wrote this post. I had finally reached a Zen state of mind about the job search, and was composed, after the interviews, for whatever might come down the pipeline. On a Friday afternoon, just skirting the very end of the “you’ll hear from us this or next week, once we’ve met and made a decision” timeline, I got the call with an offer.

I’m sure you know it’s an employer’s market right now, and to make money matters worse, they’re a non-profit organization. I’ve seen their financials, they’re modest. He was surprisingly frank about the salary, the range for the position in terms of in-grade promotion possibilities, the fact that it wasn’t as high an offer as he’d previously mentioned, and reviewed the almost-robust benefits.

I sent out feelers to my corporate mentors in the field: their translation was, “The bastards in HR won’t let me pay what I thought I could offer initially,” or perhaps, “There’s not enough money right now.” I laid out a set of negotiating terms where I thought they could make the offer more palatable, and presented them to the manager over the phone.

The results of the negotiation were not favorable. They were able to meet one of my three requests (relocation assistance), wouldn’t guarantee the second but also would rule it out (6-month salary review instead of just an evaluation), and the third couldn’t be met because of internal equity issues (more money). While unhappy, I wasn’t surprised. I had taken the time, after sharing my proposed changes, to run the numbers and had decided the opportunity to get in the door was valuable and worth taking less money for a salary and a chance to prove myself. Though it wasn’t “enough” money, the offer wasn’t paltry: salary, full benefits, relocation assistance, growth opportunities, professional development classes. The other alternative, “coasting” on unemployment, hoping for an equally stimulating job in a relatively stable company before my benefits or money ran out, simply was no option at all.

I still have many challenges to face: moving out on my own for the first time, continuing to support my family from across the state, learning a whole new dimension of management, adding new layers to my personal financial management skills. It’s a relief to be through, at least for now, with this particular challenge of a job hunt during a recession.

Lessons Learned:

Do your best to leave your contacts with a great impression of you even in rejection. They will remember you, even if they don’t at first.

Don’t accept an offer at face value. It’s entirely reasonable to thank them for their time, and let them know you’d like a chance to review the offer. I knew he was anxious to move to a resolution/acceptance when he gave me his home number and asked me to feel free to call or email anytime I was ready to talk.

Do have a good range of mentors, corporate and non-corporate, currently working and retired. Your mentors will push you to ask for a wide range of benefits and perks you might not have thought to request or consider, and should give you a eyes-on-the-ground opinion of what the market will bear or insight into company politics. Their perspectives are invaluable.

Don’t underestimate the power of a strong reference. I selected people I could explicitly trust, who were great communicators and kept me in the loop when the hiring manager reached out to them. They also wrote glowing recommendations.

Do be aware your interviewer’s got contacts too. Though I wasn’t aware of their career intersection, one of my recommendation letters was written by someone my hiring manager knew personally. This lent more credibility to my claims of achievement.

Do spend time helping others around you, it keeps your brain fresh, your attitude positive and your confidence high. Besides, it’s just the right thing to do.

Resources and food for thought:

{ 9 comments }

May 22, 2009 seems like ages ago. That is the date that the Credit Card Accountability, Responsibility and Disclosure (CARD) Act became a law, changing the way credit card issuers interact with their customers. As of today, this law is now fully in effect.

The new regulations are designed to help protect consumers from practices that could be financially harmful. The Federal Reserve calls these practices “unfair or deceptive.”

Here are the main stipulations taking effect today.

  • Credit card companies must give 45 days notice before changing terms, including raising interest rates. They must provide instructions for opting out.
  • Issuers must apply payments to balances with the highest interest rate first. This is a welcome change for consumers. Previously, if you had a promotional rate of 0% for some purchases but a regular rate for others, your payments go to the promotional balance until paid in full, regardless of the timing of the purchases.
  • Double-cycle billing is no longer allowed. You cannot be charged finance charges from a prior statement period.
  • Payment due dates must be the same every month. With one of my credit cards, the due date can fluctuate by several days, from the end of one month to the beginning of another. This should end this practice.
  • Issuers cannot raise the interest rate on existing balances. Most issuers have already gotten around this requirement by changing “fixed” interest rates to “variable” interest rates. Fixed and variable have specific definitions in the industry; “fixed” rates can still be changed at any time while “variable” rates are tied to an index and fluctuate often. There are other exceptions, as well.
  • Customers must opt in to over-limit fees. If you would rather have the ability to charge above your credit limit, you can contact the issuer to allow this feature. Over the past few years, this has been the default, surprising card users who do not monitor their usage.
  • Credit card companies cannot charge extra fees for paying your credit card bill. There is an exception. If you request an expedited (same-day) payment to avoid a late fee, you could be charged a processing fee.
  • Minors will not be able to own their own credit cards. Any customers under 21 years of age must have a co-signer if they want accounts in their own names or show proof of income. Also, credit card marketers cannot use free gifts to lure college students to sign up within 1,000 feet of a campus.

While the industry has complained loudly about these new regulations while they were being debated in Congress, credit card companies have accepted the inevitable. As we’ve already seen, there are certainly ways for credit cards to continue earning revenue through fees and interest. In addition, issuers are keeping a tighter hold on credit, so some are finding it difficult to qualify for new credit cards and existing credit limits are being reduced.

I have no doubts the credit card industry will continue to survive and thrive, even if they have to make life more difficult for their customers. The Credit CARD Act, fully in effect today, helps protect consumers but not without some side effects.

The Credit CARD Act has been a popular topic on the Consumerism Commentary Podcast. Listen to these interviews:

{ 11 comments }

Today’s guest on the Consumerism Commentary Podcast is Dr. Robert Manning, author of Credit Card Nation: The Consequences of America’s Addiction to Credit, and founder and CEO of Responsible Debt Relief. Tom Dziubek and Dr. Manning discuss the results and effects of the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009.

Also in today’s program, I speak with Tom about several suggestions for handling layoffs, still a common concern as the job market is one of the last aspects of an economy to improve following a recession.

 

To listen, use the player above (Adobe Flash required), download the podcast here, subscribe to the podcast RSS feed, or use the iTunes link. Note: open links in a new window (Ctrl-click or Command-click) to avoid interrupting the podcast.

[00:00] Introduction from Flexo
[00:37] Interview with Dr. Robert Manning, Credit Card Nation
[01:27] Intents of the 2009 Credit Card Act
[05:24] Dr. Manning’s take on the effectiveness of the act
[08:11] Recap of the Credit Card Act goals
[08:58] Difference between fixed and variable rates
[11:35] Discussing the possibility of congress acting to close loopholes
[12:28] Ways that credit card companies have been reacting to the bill
[13:33] Behavioral profiling used by credit card industry
[17:57] Ways for people to prepare themselves for changing credit card company policies
[19:09] Dr. Manning’s current projects
[23:00] Tips on how to handle a layoff with Flexo and Tom
[23:35] Re-evaluating your life goals
[25:28] Determining the steps to reach your goals
[27:33] Seeking financial assistance
[30:18] Make smart financial decisions
[31:27] Re-evaluating all of your expenses
[32:01] 401k strategies
[32:25] Sharpening your skills
[33:49] Using your talents as a consultant
[35:24] End

We always welcome feedback from listeners. If you have any comments for this episode or for any other, or if you have suggestions for future episodes, please leave us comments here or email us at podcast at this domain name.

{ 0 comments }

Consumerism Commentary Podcast

by Flexo

The Consumerism Commentary Podcast is a weekly personal finance show, hosted by both Tom Dziubek, a former podcaster with the Wall Street Journal, and Jay Frosting, who started his first podcast in 2005 for fans of novelty rock music. Each week, the show offers commentary about money management, getting out of debt, budgeting, consumer issues, ... Continue reading this article…

Read the full article →

The Greatest Loss of This Recession

by The Weakonomist

This is a guest article by The Weakonomist, an anonymous blogger responsible for everything at Weakonomics.com. As a banking insider he’s witnessed the economic implosion from inside the bubble. You can usually find him at the corner of Wall Street and Main Street throwing rocks at traffic. My retirement accounts have dropped as hard as ... Continue reading this article…

31 comments Read the full article →

It’s Not Just About the $400 Tax Credit

by Smithee

When talking about the 790 billion dollar stimulus bill currently nearing the end of its congressional marathon, it’s tempting for people to focus on the direct, short-term benefits, namely a $400 tax credit, and how such a thing won’t go very far in benefiting most people. I tend to agree, but I’m also the first ... Continue reading this article…

13 comments Read the full article →

Keep Your Job Amidst Layoffs

by Flexo

Despite the fact that my company is squarely within the financial sector, we have so far been immune to massive layoffs taking place around the country, particularly in this industry. While I have something to “fall back” on — and actually, in terms of pure numbers, I could probably do better by leaving my day ... Continue reading this article…

8 comments Read the full article →
Page 1 of 212