Consumerist

Tell 'em Plum's hiring

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

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.

@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.

@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!

@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.