Bank of America will “scale back its structured products unit, stop offering collateralized debt obligations and sell the prime brokerage that caters to hedge funds, eliminating 650 jobs.”

This is on top of the 3,000 jobs they’ve already cut in October, when CEO Kenneth Lewis told the world he’d had “all the fun I can stand in investment banking.”

The party is officially over, boys and girls. [Bloomberg]

Comments

Edit Your Comment

  1. EncephelanetRepairHelperGuy says:

    Tell ‘em Plum’s hiring

  2. MercuryPDX says:

    I wonder if any of this has to do with the Countrywide acquisition…

  3. Snorbert says:

    I certainly am no financial wizard but why acquire Countrywide if you are firing people in October and now? One day when I rule the world I may see the logic, but for now I remain confuzzled.

  4. LTS! says:

    @Snorbert: Well, don’t feel bad, even a financial wizard may not understand the concept of mergers and acquisitions. Without really being in the business it’s damn near impossible to fully grasp why a company would do something like that.

    However, from a simple point of view, sometimes you spend money to save money. If acquiring Countrywide provides an opportunity for more revenue it may make sense. Meanwhile, cutting a floundering department or business market makes sense as well. You might ask why not just fix the floundering department. And quite simply why would you fix something if the ROI on that investment would not be where you wanted it once you had righted that department.

    Add that onto simply realigning business markets, and I think you can begin to understand why it happens.

  5. NoWin says:

    @Snorbert: Think of alllllll those new accounts they now have where BofA can cross sell credit cards or equity loans and then start applying mega-service fees!

  6. jeff303 says:

    @LTS!: Exactly. Countrywide was a good acquisition for them because they got it cheap. Conversely the divisions they cut probably weren’t pulling their weight relative to the expense of keeping them.