Boston, MA 06/30/2014 (wallstreetpr) – Bank of America Corp (NYSE:BAC) intends to further reduce its financial burden, but this time around eliminating more jobs at its loss-making Legacy Assets and Servicing business in Charlotte, North Carolina.
The company has informed 540 employees at the delinquent mortgage loans handling unit about their impending layoff. The employees have been issued with a 60-day layoff notice as the company moves to reduce costs and expenses in the unit amid poor business performance.
The latest layoff program will reduce workforce at the unit by 60 percent. The company has already performed layoffs in the business in the past.
The Legacy Assets and Servicing business has been a loss-making operation that weighs heavy on the bank’s bottom line. The unit reported $4.9 billion loss in 1Q2014, indicating an increase of $2.7 billion loss compared to the same period a year earlier.
The latest layoff at Bank of America Corp (NYSE:BAC) becomes the largest single big bank layoff in Charlotte since 2009. Many big banks have been reducing workforce in mortgage-related operations to support bottom line improvement amid lackluster performance in the segment.
Simplifying the company
Under a business strategy known as Project New BAC, CEO Brian Moynihan has been reducing delinquent loans in the company while eliminating jobs related to the same in efforts to simplify the company to make it more profitable. In 2011, the bank announced plans to cut 30,000 positions from its ranks while delinquent loans dropped to 277,000 by the end of 1Q2014. The bank reported that expenses in the delinquent loans unit dropped by $1billion to $1.6 billion in 1Q2014. It plans to bring the expenses down to $1 billion by the end of this year.
Redeployment of staff
Bank of America Corp (NYSE:BAC) announced that at least 150 employees affected in the latest layoff move will be redeployed within the company, especially in the consumer call center in Charlotte. Project New BAC has helped the company to shore up its balance sheet and uplift its stock price.