Bank of America To Cut Tens of Thousands of Jobs
On the same day that President Obama plans on sending his $447 billion jobs bill to Congress, Bank of America announced that they will be cutting "about 30,000" jobs over the next few years.
The move is the first phase of cost-cutting measures that are expected to save the company billions upon billions of dollars. The initial cuts are to be made at the consumer/small banking level, with additional cuts expected to be made to the global corporate banking and commercial banking businesses later in the year.
This move also comes on the heels of a couple of Bank of America asset sales, including a much-discussed $5 billion investment from Warren Buffett.
The irony of Bank of America's impending job cuts, just a few days after President Obama's jobs bill speech, was not lost on many today. The announcement from BAC just illustrates the challenge that the US economy is going to have in adding jobs, regardless of whether or not Obama's jobs bill gets through Congress.
The national unemployment rate is currently sitting at 9.1% (as of August 2011). Many economists believe that the unemployment rate will be sitting at around 9% by the time that voters go to the polls in November of 2012. I think that this 9% rate assumes that the US economy won't fall back into recession, which is looking like a very real possibility at this point.
It's certainly going to be tough sledding on the job creation front over the next 15 months - consumers aren't buying and companies aren't hiring due to slackened consumer demand. It's a vicious circle that probably won't be broken for a while, much to the detriment of President Obama and his 2012 re-election bid..
Source: ABC - Bank of America Confirms 30,000 Layoffs
Filed under: The Economic Meltdown