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The Coming Depression - "Mass Layoffs" In U.S. Up 3 Percent


VIP Member
Jan 17, 2010
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New Jersey
The jobless numbers that came out Friday were hardly encouraging. The government said the unemployment rate in August was stuck at 9.1 percent, with as many jobs lost as created. Here's some more bad news: The number in a category the government calls "mass layoffs" has jumped by 3 percent. Mass layoffs are when employers let go of 50 or more people at one time. CBS News correspondent Ben Tracy reports that when Borders closed all of its book stores this summer, more than 10,000 people suddenly found themselves out of a job. "We kinda all just walked around in a daze. We didn't know what to do," says former Borders employee Stacy Murray.

"I think things are gonna turn around. I'm optimistic things are gonna get better," Robert says. But back in San Diego, where California's unemployment rate is second-highest in the nation at a whopping 12 percent, Stacy's search for a new job is much harder. "How can the economy support all those people looking for jobs? It makes me feel like I have a lot more competition," Stacy says. It's a competition she can't afford to lose.

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Wise ol' monkey
Feb 6, 2011
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Okolona, KY
BoA to layoff 30,000...
More layoffs looming on Wall Street
September 12, 2011: Wall Street should brace for an autumn of upward revisions among the big banks. Not for profits or revenue, but in the number of layoffs to come.
Bank of America announced a five-fold increase Monday in its number of layoffs, noting that it plans to get rid of 30,000 jobs over a yet unspecified period. Earlier this year, the banks said it would cut 6,000 jobs by the end of the third quarter. Expect a perhaps not as drastic but significant increase in layoffs from Bank of America's major competitors in the coming weeks and months. "Look across the banking industry, you'll hear the same thing happening soon," says Rochdale Securities banking analyst Dick Bove. One of the latest iterations of the Wall Street layoff is the so-called "tap, tap" layoff.

Firms, including Goldman Sachs and Credit Suisse, have begun a series of quiet layoffs in which employees were told in August that they could retain their salary and title but would not have a job as of Oct. 1, according to two sources who have interviewed prospective employees from these firms. While crediting the banks perhaps with a bit of altruism as it's easier to find a job with a job, the primary drivers of these "tap tap" layoffs is twofold: The financial institution can decrease the number of reported layoffs if these employees find other jobs. Secondly, the banks will lower their expenses for the fourth quarter. Goldman Sachs and Credit Suisse declined to comment.

In addition to Bank of America's planned layoffs, Barclays announced 3,000 layoffs and Credit Suisse said it would cut 2,000 jobs this year. Citigroup, Barclays, and Morgan Stanley have not announced new layoffs for 2011 and declined to comment for this story. A spokesperson for JPMorgan Chase says the bank plans on adding thousands of jobs this year. With the exception of JPMorgan, Wall Streets job losses could hit six figures this year, say experts. "Department heads are literally looking at their numbers every day and trying to figure out whether they can keep a body or a body will go," says a source inside a major investment bank with knowledge of the employment situation.

Bank stocks have taken a beating this year. While Bank of America is thought to be in the most perilous position, with its stock down 47% since the beginning of the year, Citigroup's stock is off 43%, JPMorgan Chase's 24%, and Barclay's is down 44%. While the official tallies will remain in flux throughout the fall, many of the cuts are expected to come from the retail side of the banks. Financial institutions like Bank of America with a large retail footprint are expected to make cuts from these areas. "Banks are in cost cutting mode. Banks with the biggest retail presences have the best opportunities to become more efficient and bring down costs through layoffs," says Anthony Polini, a banking analyst at Raymond James.


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Bank of America cutting 30,000 jobs
September 12, 2011: Bank of America said Monday that it plans to eliminate 30,000 jobs as part of a plan to save $5 billion.
The announcement came after Chief Executive Brian Moynihan outlined the bank's strategy at an investor conference in New York. BofA has already disclosed plans to eliminate a total of 6,000 jobs this year. And it recently announced a management shakeup that effectively will split the bank into two units: one serving consumers and one serving commercial clients. The bank said it expects a "significant portion" of the reduction in headcount to occur through attrition and the elimination of unfilled positions. BofA had a total of 287,000 employees as of June 30.

The move, part of an ongoing reorganization launched last year called the "Project New BAC," will play out over the next few years. In the first phase of the plan, BofA said it expects to save $5 billion, or 18% of its projected $27 billion in overall costs, through 2014. The second phase will begin in October and run through 2012. The cost reductions stem from changes BofA has made in its consumer and small banking business, credit card operations, home lending as well as global operations and certain support areas. "We're a much simpler company than we were 24 months ago," Moynihan said.

Shares of BofA rose 1.3% in morning trading. The company's stock has taken a beating this year, tumbling about 48% from January. Moynihan said the company will continue cutting costs as part of a plan to refocus on its core businesses, but he declined to provide details on future reductions. Moynihan acknowledged that BofA faces a challenging environment, pointing to the weak economy, low interest rates and the bank's troubled mortgage unit. But he stressed that BofA has been focused on building "a fortress balance sheet" to help offset any future losses. It has been doing that, he added, by "getting out of the things we don't need to do."

The bank has been struggling to tamp down widespread speculation in financial markets about potential legal costs and loan losses in its mortgage unit, which has been the worst performing of its six business lines. BofA announced an $8.5 billion settlement earlier this year with 22 of the nation's largest fixed-income investment firms over mortgage-backed assets. The assets in question stem from BofA's purchase of Countrywide Financial, once the nation's largest sub-prime lender, in 2008. The settlement, which has yet to be approved by the courts, is being challenged.



May 15, 2012
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