Bank of America moves to cut jobs

Bank of America is acting swiftly in the wake of its disappointing earnings, announcing cuts in its work force that run deeper than investors had foreseen. The bank said late Wednesday that it planned to cut 3,000 jobs, mostly in investment banking, after incurring about $4 billion of trading losses, defaults and write-downs in the third quarter. Brian Moynihan, head of wealth management, will replace Gene Taylor as head of the 20,000-person securities unit, the bank added.

The chief executive, Kenneth Lewis, said he would scale back in investment banking after profit at the division plunged 93% to $100 million. Lewis, who blamed the drop mainly on the company's mistakes, promised to weed out units that posted four or five annual profits "and then give it all back in one year."

"While some of these changes are a direct result of our underperformance, others have been contemplated for a number of months as we looked at how we could operate more effectively," Lewis said. Lewis, 60, was reversing a strategy outlined by Taylor at an investor conference in February, when he said Bank of America would lift corporate and investment banking profit by 70% and revenue by 50% over the next five years. The goal was to gain a top-three share of investment banking in the United States within five years. In the third quarter, Bank of America marked down the value of financing for leveraged buyouts and other lending by $247 million, and trading mistakes led to $717 million in losses. Lewis signaled the job reductions were coming last week during his earnings conference call with analysts when he said the results were "not acceptable."

"I've had all the fun I can stand in investment banking," Lewis said October 18. The next day, Chris Hentemann left as head of global structured products, which had reported a net revenue loss of $527 million.