People walk by a Bank of America branch office on July 18, 2012 in San Anselmo, Calif.
People walk by a Bank of America branch office on July 18, 2012 in San Anselmo, Calif. - 

Bank of America is accelerating plans to cut costs by laying off workers. According to the Wall Street Journal, the bank has set a target of cutting 16,000 jobs by the end of this year -- about 6 percent of the bank's workforce.

The company has actually been working on this transformation since the financial crisis, says Dan Fitzpatrick, who wrote the piece for the Journal. "It just takes a long time to turn around a ship as big as BofA," he says.

Before the crisis, the Bank went on an acquisition binge, and it has taken time to figure out what fat to trim.

BofA may have had little choice, according to Chris Low, chief economist at FTN Financial. In traditional banking, he says, "you make money by taking in deposits and making loans. It's the difference between those two where banks earnings live."

But as the Federal Reserve continues to drive down lending rates, margins for such banks are becoming thin.

"The Bank of American decision to lay people off," argues Low, "is a decision to try and improve their profits through the cost side. They can't do it by earning more money, so they're going to do it by saving money on the costs."

For the bank to truly bounce back, it will have to continue to clean up their lending process; then decide where they should focus on growth, says Low. That will probably mean less focus on storefront retail and more focus on investment and non-traditional banking.

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Follow Jeremy Hobson at @jeremyhobson