The Bank of America is looking to terminate more jobs; the operations and technology division is taking the big hit on the massive overhaul and the bank’s sole goal of cutting costs in every way possible. Recently, the bank has announced that it is going to put its pending cap to the $53 billion mark, and now they announced that it is just the beginning.
The cost cutting involves vicious upgrade on everything they can replace people with technology; their Charlotte, North Carolina headquarters took the highest beating in their newfound plan. The cost cutting for the company is very crucial; just recently, the company had settled a whopping $2 million lawsuit in Los Angeles County District.
BofA’s Lay off Plans
The cost cutting and mass termination of employees are considered as a daring move to boost financial targets according to Chief Executive Brian Moynihan. The biggest threat for large scaled banks like the Bank of America is the massive costs that amount on their daily operations and the massive growing technology; old ones that they used reliable but are way past of their time, while new ones tend to cost more to develop.
BofA, on the contrary, is still hiring personnel that can work on the company, but according to Moynihan, they are actually reducing cost more than those who are joining. On a recent conference, Chief Operating Officer Tom Montag mentioned that the bank’s global banking and markets unit employs 1,300 employees that cost about $1.3 billion to maintain and run.
BofA’s $53 Billion Spending Goal
The bank has been keen on keeping the spending goal at the $53 billion, and when replacing people with technology the company’s CEO TomMontag noted that “How much technology can we do that replaces people? How many things do we have that we can use it? How much big data can we use that helps us target better and not waste our time on certain things?”
Montag gave a solid example on how they can optimize their spending with technological advancements; he set the bank’s foreign-exchange trading as an example saying “I’m going to go back and look at your FX business, how much is straight-through processing?” and “How much can I spend to lower the amount of people I have that touch this? Can I go from 70 percent straight through to 99 percent? Every one of those things adds up to hopefully make us more efficient.”
The bank’s potential money saver is replacing their markets risk-management and trading platform with more advanced and technological ones.
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