Analysts expect more layoffs following merger of banks (11,000 jobs)

[UpInArms]

http://www.buffalonews.com/editorial/20040311/1011023.asp

Bank of America Corp.'s $48 billion purchase of FleetBoston Financial Corp. may lead to the elimination of as many as 11,000 jobs, a 6 percent reduction, according to analysts at RBC Capital Markets and Lehman Brothers Holdings.

Bank of America Chief Executive Officer Kenneth Lewis, 56, has targeted $1.6 billion in expense reductions once the bank combines with FleetBoston early next month. The Charlotte, North Carolina-based company hasn't said how many of the two companies' 181,000 workers would lose their jobs.

Employees make up about 50 percent of the two banks' operating costs. Gerard Cassidy, an analyst at RBC Capital Markets, said Bank of America would have to slash 9,000 to 11,000 jobs to generate half of the planned expense reductions, with the rest coming from lower costs from areas including marketing, real estate, and purchasing supplies and services.

"Those are reasonable numbers based on figures the banks have made available," said Cassidy, who rates shares of Boston-based FleetBoston "outperform" and doesn't own any.

...more...

Aren't M&A just ducky? :mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad:

[4dsc]

1. why mergers not good to the economy

but you can bet the poor suckers that are left will have to work their asses off now.. Its synergies!! Working 60 hours a week for the man..

[denverbill]

2. But surely customers will reap the savings, right???

I know my bank fees have certainly gone down over the last 20 years or so.

And I know car prices plummeted when manufacturers moved the jobs to Mexico too.

[salin]

4. hehe -

well - now instead of paying higher wages of US workers... there are instead increased costs due to the massive debt service involved from the buy-out merger... or the costs due to the debt service in building all those new factories.... or the costs of reimporting (e.g., transport) all of those products...

[UpInArms]

6. that's the logic that they

used on the energy deregulation push -

because deregulation would result in lower energy bills for the automobile manufacturers, the consumers would see a lower cost in the price of the vehicles :crazy:

It didn't matter that the consumers were going to pay utility bills that doubled and tripled - that was not to be thought about -

and that would really help all of those that couldn't buy a new car (huh?)

[Occulus]

8. Shouldn't mergers be illegal?

Isn't it, technically at least since corporations have personhood under the law, really one person buying another person when a so-called "merger" occurs?

I can't "buy" my spouse; hell, in this country, I can't even marry him. So how is it that a NONhuman legal fiction gets more rights to pair up than I do?

[UpInArms]

11. looks more like agreed to cannibalism

than marriage to me -

[bearfan454]

10. That is how they do us.

Greed never ends.

[frank frankly]

3. Productivity is going to go up!

isn't that what really matters?

:puke:

[Ilsa]

5. Somewhere around 25,000 banking jobs were lost

in Texas during the 1980's from failures and interstate consolidations.

I have friends losing their banking jobs five years before retirement due to office consolidations and duties being eliminated. What i found interesting was that some of the duties being eliminated had to do with variance analysis, especially on income statement items, sometimes with changes as high as $1B. Sort of makes me lose confidence in those numbers driving the price of the stock I own (or just sold.) And no, I don't have much confidence in the auditors.

[Crachet2004]

7. Look for a whole bunch more of these type announcements...

Every time something like this happens, more Democrats are made. I hate to see anyone lose their job, especially people like these banking-types (some of who, I know, are already Democrats) , that probably don't know how to do much else. Soon, most of these type jobs will be performed in 3rd World nations.

If I was a banker today, I think I'd be taking a course in auto mechanics or HVAC...might stay out of the coming soup lines, that way.
How can these mostly GOP people continue to vote for Bush when the writing is so clearly on the wall?

They think their asses are Gold, is the answer. Whitecollar workers in America today are living in a dreamworld...almost all of them can, and will be replaced-soon.

It will happen a lot faster than the steady bleeding of manufacturing, since Reagan. That was a fairly slow process compared to what is getting ready to happen to whitecollar employment. There were unions to slow it down, and finished goods had to be shipped BACK to this country...the market is here. That is one reason why we still have some manufacturing left.

Whitecollar product, on the other hand, can often be 'shipped' over the internet for pennies, and the closest thing they have to representation is the GOP!

Good luck all you GOP wannabes out there! You are gonna need it!

[Ilsa]

9. As one laid off software engineer said on ABC News...

"If you have a job behind a desk, it's at risk for outsourcing." Another comment: "If you have a job with a telephone and a computer, your job is at risk."

I'm an RN now after leaving banking.

[Crachet2004]

12. That is exactly what I tell all the young ones in my family...

Two years of school, and you can get a job wherever you go...best deal I know of. In our three state region, we are running about a 2o% shortage of RN's.

If you want to go to school for something else later, fine, but you'll always have something to fall back on.

[Ilsa]

13. Unfortunately, I haven't seen any RN program

even the Associates Degree in Nursing, that you can finish in two years. An applicant usually has to have most of their academics finished before being accepted into those programs because the competition is so tough. It usually ends up being a three+ year program, even for the Associate of Applied Science in Nursing, which is what I have on top of my Bachelor's degree in another field.