Bank of America Business Model Simplification and Merger Transition Yield Additional Savings Opportunities
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CHARLOTTE, N.C., Oct. 7 /PRNewswire/ -- Following a recent simplification of Bank of America's business model, senior executives at the company are engaged in a thorough review of major business units and supporting functions to ensure the company is operating as efficiently and effectively as possible. As a result of this review, and additional opportunities the bank has identified to operate more efficiently through the merger with FleetBoston Financial, the company will further reduce its workforce by approximately 2.5 percent, or 4,500 positions. The company estimates severance impacts of approximately $150 million over three quarters, from the third quarter of 2004 through the first quarter of 2005.
Last month's realignment greatly simplified the bank's organizational model, combining Consumer Banking, Consumer Products and Small Business Banking into one major business line, and moving Premier Banking into the Wealth & Investment Management organization. The realignment also led to the creation of the bank's new Technology, Service & Fulfillment group, which will streamline the bank's service infrastructure. The bank will continue to leverage process improvement opportunities to gain efficiency in its operations.
Each business will continue to provide customers high standards of service, while retaining the ability to invest in growth opportunities. The company anticipates that these savings will help support ongoing investments in growth opportunities in Consumer & Small Business Banking, enhanced Global Corporate and Investment Banking capabilities and additional sales capacity in Wealth and Investment Management.
The job reductions, which begin this month, will occur across the company and will be predominantly in non-customer-facing positions. The company will provide career support resources, job posting services, extended benefits and severance pay to associates whose jobs are affected. Bank of America currently employs approximately 178,000 people. The reductions will not affect employment commitments Bank of America has made in New England.
Bank of America continues to pursue its goal of achieving organic growth by offering customers unmatched convenience and expertise, high service quality, product innovation and a variety of financial services delivered as efficiently and effectively as possible. The company will deploy its resources to manage risk and reward effectively and to invest in growth opportunities that advance its strategy and enable it to serve the needs of customers, communities and shareholders.
Bank of America is one of the world's largest financial institutions, serving individual consumers, small businesses and large corporations with a full range of banking, investing, asset management and other financial and risk-management products and services. The company provides unmatched convenience in the United States, serving 33 million consumer relationships with 5,800 retail banking offices, more than 16,000 ATMs and award-winning online banking with more than 11 million active users. Bank of America is the No. 1 Small Business Administration Lender in the United States. The company serves clients in 150 countries and has relationships with 96 percent of the U.S. Fortune 500 companies and 82 percent of the Global Fortune 500. Bank of America Corporation stock (ticker: BAC) is listed on the New York Stock Exchange.
This press release contains forward-looking statements, including statements about the growth and earnings outlook, service standards, financial products and employment levels at Bank of America Corporation. The forward- looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from such forward-looking statements include, among others, the following: 1) projected business increases following process changes and other investments are lower than expected; 2) competitive pressure among financial services companies increases significantly; 3) general economic conditions are less favorable than expected; 4) changes in market rates and prices may adversely impact the value of financial products; and 5) decisions to downsize, sell or close units or otherwise change the business mix of the company. For further information regarding Bank of America Corporation, please read the company's reports filed with or furnished to the SEC, which are available at http://www.sec.gov .
SOURCE Bank of America
CONTACT: Investors, Kevin Stitt, +1-704-386-5667, or Lee McEntire, +1-704-388-6780, or Leyla Pakzad, +1-704-386-2024, or Media, Alex Trower, +1-212-933-3382, all of Bank of America
Web site: http://www.bankofamerica.com