- Headcount cuts are back on this year in (BofA)‘s Global Banking and Markets division, sources say.
- (BofA) pledged no layoffs in 2020, giving some employees a one-year reprieve.
- Some staffers have been let go, others have raised their hand for an exit package.
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Last year, amid the uncertainty and chaos in the early days of the pandemic, Bank of America committed to avoiding layoffs for the year.
For staff in trading and investment banking, that provided a reprieve from the annual culling of underperformers that’s common across Wall Street.
But now the reprieve is over. Headcount cuts are back on this year in (BofA)‘s Global Banking and Markets division and ongoing as of this week, according to sources familiar with the matter.
While some employees are already being handed pink slips, other senior staffers have voluntarily raised their hands to take an exit package, the sources told Insider.
A Bank of America spokesman declined to comment.
The precise percentage of staff getting the axe wasn’t immediately clear. One source familiar with the plans said despite the year off from cuts it wasn’t a larger reduction than the last time the firm reduced headcount in 2019.
At the height of the pandemic, most banks pledged not to cut staff. But even as rivals including Goldman Sachs, JPMorgan Chase, and Wells Fargo resumed layoffs later on in the year, CEO Brian Moynihan vowed to stand by his commitment through the remainder of 2020.
Investment banking and trading operations posted blowout performances in 2020, but institutions as a whole suffered steep profit declines as they built up billions in buffers against future loan losses tied to the pandemic’s economic fallout.
The big US banks have generally cut or held bonus pools steady in response.
(BofA) saw 2020 profits fall 35% to $17.9 billion while revenues dipped 6% to $85.5 billion.
The firm reduced its overall bonus pool, and Moynihan’s compensation was cut by $2 million, or 7.5%, to $24.5 million.
The bank also revised its compensation policies for higher earners, increasing the proportion paid out in stock as well as the vesting period to collect deferred compensation. Another change that would have resulted in forfeited compensation for employees looking to retire early was walked back after outcry from staff, Bloomberg previously reported.
This story is developing.