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November 02, 2011
BofA employees flood bank's rivals with resumes
CHARLOTTE, North Carolina (Reuters) - Bank of America Corp employees are flooding rival companies with resumes as a major cost-cutting program gets under way at the second-largest U.S. bank.
Competitors say they are getting an influx of calls, emails and LinkedIn connection requests as the bank embarks on a plan to slash 30,000 jobs over the next few years. The employees are scouting jobs in retail, commercial and investment banking, bankers and recruiters said.
"It's definitely picking up," said a senior executive at a rival consumer bank.
The uncertainty at Bank of America gives competitors a chance to nab talented employees, bankers said. But they cautioned that many companies are only hiring selectively.
In the most high-profile departure, PNC Financial Services Group Inc last week hired Bank of America strategy executive Mike Lyons to lead its corporate and institutional banking unit. Lyons had advised CEO Brian Moynihan on his plan to sell off nonessential assets.
John Dunn, director of the banking and financial services practice at recruiting firm Stephen James Associates, said he has had about 20 calls or meetings with Bank of America employees in recent weeks, mostly in investment banking and capital markets operations. Normally, he might have talked to or met only two to four over that period.
"Now these folks are looking to get out of choppy water before they get displaced or asked to relocate," Dunn said. "It's much easier finding a job while you have a job."
Moynihan is chopping expenses as new regulations, a sluggish economy and low long-term interest rates are crimping profits across the banking industry. Charlotte, North Carolina-based Bank of America in particular needs to build capital to cover mortgage-related losses and meet new international standards.
The bank's efficiency program, called Project New BAC, aims to streamline a company bloated by years of acquisitions. But executives risk cutting too deeply or creating an unsettling environment for those who remain, said Beth Livingston, assistant professor of human resources studies at Cornell University.
"You get the survivor effect," Livingston said. "Everyone is on edge. There's a culture of fear that permeates the climate."
In recent months, Bank of America has laid off employees, including senior leaders, in consumer, human resources, capital markets and other areas, people familiar with the situation said. The cuts are part of a round of 3,500 layoffs announced in August and the first wave of Project New BAC, which takes its name from the company's stock symbol.
New BAC cuts began in September when Moynihan ousted consumer banking head Joe Price and wealth management head Sallie Krawcheck and handed their duties to co-chief operating officers David Darnell and Tom Montag.
In reorganizing his management team, Darnell is merging mortgage operations into the consumer bank, leaving the future position of mortgage head Barbara Desoer unclear. The shake-up also displaced Bank of America veteran Henry Fulton, who has held top credit card, mortgage and consumer banking positions.
Last month, the company said the "implementation" of the first wave of New BAC, which focuses on consumer operations, was to start in October. The second phase, which will address capital markets, commercial banking and wealth management units, begins in the spring.
Bank of America said it had 288,739 employees on September 30, up from 288,084 three months earlier, but about 2,000 have been told they will be let go.
Bank of America spokesman Scott Silvestri declined to comment on the layoffs.
The company ranks behind JPMorgan Chase & Co in terms of assets.