Bank of America will cut 35,000 jobs over the next three
years when it integrates the Merrill Lynch business and prepares
for lower levels of business in the recession. But core IT staff
are likely to be in a strong position to keep their
jobs.
In September, Bank of America
agreed a $50bn deal to buy Merrill Lynch which has 8,000
employees in EMEA, including 4,500 employees in the UK.
The bank, which has targeted $7bn in savings by 2012 from the
takeover, is expected to integrate overlapping technology in the
two organisations.
"The reductions are coming from both companies and affect all
lines of business and staff units," said Bank of America. "As many
reductions as possible will be made through attrition.
"The reductions are designed to eliminate redundancies created
as a result of the merger with Merrill Lynch and to reflect the
current recessionary environment."
But the jobs of
core IT staff in the UK are likely to be more secure.
Chris Skinner, CEO at financial services think-tank Balatro,
said IT people involved in algorithmic trading strategies were
unlikely to lose their jobs. "Merrill Lynch's IT operation is
highly automated using algorithmic trading. As an IT operation it
is one of the most sophisticated in the City."
The redundancies announced by Bank of America, which represent
11% of the combined workforce, follow
50,000 job cuts
announced by Citigroup last month.
Citigroup CEO Vikram Pandit said it was feasible for the bank to
take 10%, 15% or 20% off its cost base, especially in IT and
operations.
Other investment firms that have announced job cuts include
Credit Suisse and Nomura.
Bob McDowall, analyst at TowerGroup, said
as many as 300,000 people could have lost their jobs in the
financial services sector globally by the end of 2009, with IT
professionals comprising up to 25% of those affected. These cuts
will come as mergers are completed and companies prepare for a
slowdown in business.