Bank Of America Could Cut 30,000

Print Email

If it is true, it would be another sign of desperation. The Charlotte Observer reports that Bank of America (NYSE: BAC) could lay-off 30,000 people over several years.

The bank has come under new pressure as the government announced a suit against 17 financial firms which it claims misrepresented the risk of mortgage-back securities they sold to Fannie Mae and Freddie Mac. The total losses from these was $200 billion. The possibility that the government can recoup of all that is unknown.

Bank of America (NYSE: BAC) has been rumored to need over $100 billion in new capital. There have also been rumors that the firm could be taken over by JP Morgan (NYSE: JPM) or another large American bank. B of A has attacked these as false, but its share price has done little to allay fears. The stock fell to $6.01 three weeks ago. Warren Buffett invested $5 billion in the bank which cause share to rally. Subsequent bad news pushed shares, which had recovered to $8.39, back to $7.25. The stock’s 52-week high is $15.31.

Bank of America can continue to deny it will need to raise large sums of money, an act which would nearly wipe out common shareholders. The firm’s stock says many investors have bet otherwise

Douglas A. McIntyre