Bank of America to cut about 30,000 jobs
A Bank of America branch is seen in Times Square Oct. 19, 2010 in New York City.
Kai Ryssdal: This morning, President Obama had one of those Rose Garden events presidents have when they want a nice backdrop for a big announcement. It wasn't all that big an announcement this time, actually. The president just wanted to let people know he's sending his jobs bill up to Congress, and that he really wants it to pass.
Unfortunately for him, Bank of America wasn't listening. Today, B of A CEO Brian Moynihan said he's going to cut 30,000 jobs over the next couple of years. He's trying to dig the country's biggest bank out of the hole it dug for itself by getting too big too fast.
It's quite the strategic U-turn, as our New York bureau chief Heidi Moore reports.
Heidi Moore: Bank of America is the biggest bank in the country. One of out every $10 sitting in a U.S. bank account is at Bank of America. And it's bought everything from mortgage lenders to credit card companies. For years, it called itself a one-stop shop -- a universal bank.
So you didn't expect its CEO, Brian Moynihan, to say this to a group of investors today:
Brian Moynihan: We don't have to be the biggest company out there -- we have to be the best.
Wait. Bank of America doesn't want to be the biggest bank?
Anat Admati: Finally, he seems to be thinking along appropriate lines. It is a good thing that they get simpler and more manageable.
That's Anat Admati, a professor at the Stanford School of Business.
But it's not just Bank of America. All the big banks are going to become less profitable because their main lines of business are under pressure -- as long as the economy sputters.
Charles Elson runs the University of Delaware's Center for Corporate Governance and owns stock in Bank of America.
Charles Elson: At some point, you can't grow any more. You've saturated the market. You get too big to manage.
Moynihan says he'll cut billions in expenses and try to corral Bank of America's troubled mortgage business. Elson says he'll believe it when he sees it.
Elson: And if the idea is by getting slightly smaller, you become more profitable, I'm all for it. The question is, can he execute it?
Moynihan's task today was to get investors enthused about the new Bank of America. But it seems the bank still has a lot to prove.
In New York, I'm Heidi Moore for Marketplace.