Bank of America with 'Strong Performance' to Cut 4,000 Jobs by June

Bank of America (BoA), the second-largest bank in the United States, announced on the 18th (local time) that despite an earnings surprise in the first quarter, it plans to cut 4,000 jobs by June. This corresponds to 2% of BoA's total workforce.

According to major foreign media, BoA has already cut more than 1,000 jobs this month and plans to cut an additional 3,000 by the end of the quarter. As of the end of the first quarter, BoA's employees numbered approximately 217,000, a 4% increase compared to the previous year.

[Image source=AP Yonhap News]

On Wall Street, since the beginning of this year, companies like Goldman Sachs have been reducing their workforce, with Goldman Sachs cutting 3,200 jobs?the largest scale in its history?as part of efforts to tighten operations and prepare for an economic downturn.

However, Brian Moynihan, BoA's Chief Executive Officer (CEO), drew a line by stating that this round of layoffs should not be interpreted as a signal of a cooling labor market or preparation for a business slowdown. He explained that it is simply a reconsideration of the significantly increased workforce that resulted from the intense talent competition following the pandemic. During the earnings conference call that day, he said, "A recession is expected in the second half of the year," but predicted that consumer activity would not slow down significantly. He added, "Everything points to a mild recession, but we will wait and see what happens."

Despite the high-intensity interest rate hikes continuing since last year and the small bank crisis triggered by Silicon Valley Bank (SVB), BoA recorded an earnings surprise in the first quarter. BoA disclosed that its first-quarter earnings per share (EPS) were $0.94, far exceeding Wall Street's estimate of $0.82. First-quarter revenue was $26.39 billion, surpassing the expected $25.13 billion. This represents a 13% increase compared to the same period last year. Net income for the same period rose 15% to $8.16 billion.

In particular, with the improvement in net interest margin due to interest rate hikes, BoA's net interest income surged 25% year-over-year to $14.4 billion. Major foreign media analyzed that the four major large banks, including BoA, not only saw increased trading amid recent financial market turmoil but also gained short-term profits from high interest rates.

Meanwhile, on the New York Stock Exchange this afternoon, BoA's stock price was trading at $30.49 per share, up 0.4% from the previous session.

This content was produced with the assistance of AI translation services.