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Big Bank Pink Slip Pandemonium Continues As Bank Of America To Cut "Hundreds" Of Jobs
Two weeks ago, Deutsche Bank announced it was set to fire “roughly” 23,000 people, or around a quarter of its workforce as new CEO John Cryan aims to cut costs as part of a reorganization undertaken in the wake of the ouster of Anshu Jain and Jürgen Fitschen.
Anyone who might have assumed that the massive layoffs at Deutsche Bank spoke solely to the bank’s individual circumstances and thus aren’t reflective of either the abysmal state of the European “recovery” or of broader industry trends, was disappointed when just hours later, Reuters reported that UniCredit, (Italy’s largest bank by assets) was now set to lay off 10,000 across its Italian, Austrian, and German operations.
In all, 33,000 pink slips in a single day. As we noted at the time, "the layoffs don’t say much for Europe’s recovery from the debt crisis and may also suggest that far from creating jobs, the persistence of ZIRP has crimped margins forcing banks to make up the difference by getting leaner."
Today, we learn that Bank of America is set to shed hundreds of jobs as Brian Moynihan looks to offset poor performance by cutting costs. Here’s WSJ with more:
Bank of America Corp. is expected to announce layoffs in its global banking and global markets unit as early as Tuesday, according to people familiar with the matter.
The layoffs will likely result in a couple of hundred job losses, according to these people. Investment banks often trim jobs at this time of year to clear the books before bonus season.
Since the spring, Bank of America Chief Executive Brian Moynihan has said that if results from the trading business don’t improve, the unit will have to cut expenses further. Bank of America’s second-quarter trading revenue, excluding an accounting adjustment, fell 2%.
U.S. investment banks have struggled to adjust to new regulations that have crimped revenue, and a slowdown in some corners of the world economy have caused some clients to pull back on trading.
Bank of America has struggled more than most. It is the only large U.S. bank to post a decline in revenue from trading and investment banking in the first half of 2015, a time when mergers were frequent and central-bank actions created an ideal environment for trading in assets like currencies. The bank’s 7% drop in revenue from that segment compared with a 7% increase at Goldman Sachs Group Inc. and a 19% increase at Morgan Stanley, according to company data compiled by analysts at UBS.
Here's one chart and a helpful look back at some key points from the bank's Q2 results which in many ways presaged the above:
But the biggest highlight was once again in the income statement, and specifically the Global Markets breakdown, where Net Income dropped $109 million from a year ago, driven by a 9% drop in FICC Y/Y "due to declines in credit-related businesses, primarily credit, mortgages and municipals, partially offset by improvements in macro products."
On the other hand, just like with JPM, "equities revenue improved $0.1B, or 13%, from 2Q14, driven largely by increased client activity in the Asia-Pacific region and strong performance in derivatives." In short: while traders are increasingly pulling away from illiquid, volatile fixed-income, it was the Chinese stock bubble to the rescue.
So with the bank's lifeblood dropping it had no choice but to once again trim expenses, which it did thanks to not only a drop in litigation charges (expect these to rebound in the coming quarters)...
... but also due to ongoing headcount reductions.
And while the bank's entire earnings release once again focuses on the improvement in credit quality and trends, it is worth asking just why did BofA decide to take its largest provision for losses in the past two quarters at any time over the past year.
In short: in a world in which FICC is no longer the trophy horse it once was, and where the bank has no choice but to "adjust" its NIM data suggesting things are hardly improving for the bank's organic net interest arbitrage business (as was the case with JPM), BofA will have trouble growing in the coming quarters absent a material change to market conditions, especially if the Chinese bubble has indeed burst and Q3 will no longer see the benefit of equity trading thanks to Asian farmers and housewives.
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This should finally push unemployment under 5%.
Joining the ranks of the 94 million.
When it reaches critical mass.....we plan on detonating.
Very Bullish for the upcoming Holidays!
Should be a big help to the Recovery! Lots of momentum going forward....
Unintended consequence of ZIRP.
Otherwise everything is awesome.
"Collateral damage is to be expected."
~ Rumsfeld
so these would be known unknowns?
Not to worry, these bankers will be able to find a shovel-ready job close by repairing our nation's decrepit infrastructure.
Driving trucks, working concrete, running saws, humping lumber ('cuz they're the new guy).
It will all work out.
It won't be "bankers" that BoA lays off, it'll be IT, administrative etc.
Well then, they'll be more accustomed to actual work! Awesome.
Good thing we spent the past years creating more and more jobs!
NOT
They won't be displacing the Hispanic labor force in construction any time soon.
--MS 13
Hope and change beoootch!! Hope and Change!
If the Board of Directors fires Brian Moynihan, who is Bank of America's CEO and Chairman, does that count as one layoff or two? Then bank CEO Kenneth Lewis was set to fire Moynihan in 2009 when Lewis himself was forced to resign. In his 6 years, Moynihan has covered up his incompetence and arrogance by massive layoffs of bank personnel. Soon, I expect him to start laying off ATMs.
Asian markets last night....US Opens up then falls right now...it is getting very sketchy.
going to take more than a few bargain hunters to prop this thing up.
Not to worry, unemployment is only 5.1% in the land of the free.
Every laidoff worker will get 3 jobs
As long as the people in the C-suite get their bonus checks it's all groovy......
Tepper only made $3,500,000,000.00 last year.
He should apply for food stamps, an EBT card and an Obamaphone......
He'd qualify. His income is down over 99% this year....to a paltry $35MM.
Good thing he doesn't have to pay for a car (company car) or any expenses like gas, food, coffee or the daily paper.
Yeah, I see that too. If you run a bordello (pretty good paradigm for BofA, since people who go there get fucked), and you begin to see a decline in profits, would you fire the whores who were doing the "wet work" necessary to bring in income, or look at the sums you were paying out in possibly bogus "protection", and see if there might be some way to renegotiate those arrangements?
was in the local branch in the Bay Area the other day to withdraw some funny money for real money Silver....
the branch has 20 windows but only 1 teller was on duty for the open...
only 2 for the rest of the day they said....
abolishing cash....
and banking in person...
consider urselfs warned bitchez.....
A co-worker has accounts at both BofA and Wells and he mentioned that he went to both this weekend and the BofA was as you observed but at Wells they had all the windows maned. He was pissed at Wells though as they charged him a $15 fee on a no fee account lol. He told them to give the money back or he would empty his account, they said they would credit back the money. That was Saturday, no credit back yet. I left Wells a few years ago and went to a credit union, fuck the big banks.
BOFA is just the conduit for direct deposits which as soon as they arrive i withdraw "with a quickness"...
we do not leave any funds in that shit hole..
only deposit when its time to pay those bills that the old lady insist in paying electronically....THATS IT!
Chesapeake just cut about a thousand jobs today.
http://www.koco.com/news/sources-layoffs-happening-at-chesapeake-energy/...
But we're at full employment at 5.3% and in our 8th year of recovery! HOW can this POSSIBLY be?!?
Its just magical that way........
I don't know, maybe mocha jesus will give a press conference soon to tell us numbers are racist, and blame the Confederate flag for all this mess.
It's one of those exceptional American padadoxes!
YES Good we are at full employment as they all should have job offers upon leaving.
Not to worry, BLS assures us that unemployment continues to decline, and remains bullish.
ATM's and online banking, Hal 9000 locking the pod bay door, just wait until they get rid of cash and safe deposit boxes.
No branches, no buildings, everything over the cloud with every cent tracked, taxed, and fee'd.
One aspect of "cashless" I foresee is drug dealers opening nice restaurants where patrons can come and have their appetites sated every day, or whenever the mood strikes them, and have the total bill conveniently placed on their debit card.
If this doesn't scream crash, I don't know what does.
That is, unless banks have been rendered redundant for the peeps soon to be forced "cashless."
I understand DBK shut down their operations in Russia.
what a fucking hellhole. FUCK YOU, BOFA!!!!!!! BASTARDS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
These bankers will be roaming the streets soon looking for a fresh blood meal.
Street crime can only go up, eh?
A couple of hundred? Infinitisimal in proportional terms.
Maybe they can close a few branches and turn that into housing units for the ISIS dudes, I mean Syrian refugees.
Wow, a massive layoff of 1/10 of 1% of a bloated monster.
If these layoffs continue at this pace we'll be at 3.5% unemployment and the economy may overheat!
All those people are going to be so productive we are going to drown in wealth
Ponzi
I wish I would get laid off. 110 weeks of free Obama money sounds like the best staycation of my life!
No, it sucks. Trust me. Stay your course until the view gets better.
The wife told me to apply for disability since I have several health problems and am only 11 months from SS.
I told her I would consider it. I lke to work, even if it is difficult.
Let's weep for the newly unemployed bank workers, sentenced to a lifetime of hard labor in the productive sector.
/sarc
So what citbank is pulling all of its banks out of Massholechusetts and firing them all. Big whooptedo.
Fire Moynihan.
Was in a target store saturday. 8 self serve checkout lanes installed.
Hmmm, rise of the Robots. Too bad they won't have any work to do since nobody has any money to spend at Tar-Jay.
Hey Mr. Banker - if your profits are so fucking low even after having FREE fucking meals at the Federal Bank trough for 7 years then you're too FUCKING stupid to be running a bank or anything else. Jackasses! This goes for ANY bank - FUCK YOU!
Hey fellers! On your way out, don't forget to drop my bonus check off in the box... next to the door.
Oh, and by the way... have a very merry Christmas!
Halloween, I still put out my wife's Obama/Biden '08 signs.
Terrifies the neighborhood, I get letters for inappropriate display.
Cripes,once a year.
No need for these teller fucks, we are moving to higher margin returns; less labor costs. Download your application immediately. Our transfer fee will hit $8.00 per transaction. Quantitative Expense policy is a yard stick away.
Despotism (1946) - YouTube
From Encyclopaedia Britannica : Lasswell viewed political science as the study of changes in the distribution of value patterns in society, and, because distribution depends on power, the focal point of his analysis was power dynamics. He defined values as desired goals and power as the ability to participate in decisions, and he conceived political power as the ability to produce intended effects on other people.
.
please be top-down cuts....preferably with a guillotine!
So how is consumer confidence high with all these firings? Did htey up the EBT allowance again?
I believe that this can be traced to my run-in with BoA years ago, when they jacked up my CC interest rate to the moon after one missed payment. I immediately paid off the balance and closed the account.
Now, I will enjoy observing the karmic blowback for their countless, greed-fueled transgressions.
What if everyone took out all their cash from BoA on 11/11?
what if, maaaan?
What if the Fed promptly and quietly replaced it?
Looks like Draghi's ECB bond buying program is working out great. /s
QE doesn't work, look at Japan, U.S. and Europe. They are all struggling far more than they needed to. The financial crisis could have been over if central banks didn't intervene and allow their friends to reposition their portfolios. ZIRP and QE going down as massive failures in history. Japan's going to have to start a revolution to get out from under Abe and his money printing.
Sure hoping Buffett still has a gazillion shares of BofA when it tanks. I despise that hypocritical bastard.
might be a little more competition for the 10 AM tee time @ the Greenwich Country Club.
Hundreds of new burger flippers...
Will work for food
(elsewhere)
bullish...Pelosi taught me that every $1 in food stamps generates $6 in the economy
"In all, 33,000 (bank) pink slips in a single day."
Jamie Dimon is a billionaire.
"The layoffs will likely result in a couple of hundred job losses, according to these people. Investment banks often trim jobs at this time of year to clear the books before bonus season."
So layoffs pay for bonuses.
Little less lunch business down @ the Midtown rub'n'tug!
I can't see for all the green shoots. Baaa.