Bank of America Cuts 3,000 Jobs, Shakes Up Management (Update3)

By David Mildenberg

Oct. 24 (Bloomberg) -- Bank of America Corp., the second- largest U.S. bank, will eliminate 3,000 jobs and replace the head of global corporate and investment banking after the unit's third-quarter profit plunged 93 percent.

Brian Moynihan, head of wealth management at the Charlotte, North Carolina-based company, will succeed Gene Taylor as head of the 20,000-person division, according to a statement. Most of the jobs will be cut from the investment bank, spokesman Robert Stickler said in an interview.

Chief Executive Officer Ken Lewis said Oct. 18 he would scale back the investment bank following about $4 billion of trading losses, defaults and writedowns at the company in the third quarter. Lewis blamed the losses mostly on the bank's own mistakes, as well as turmoil in credit markets.

``These cuts are higher than what I was anticipating,'' Jefferson Harralson, an analyst in Atlanta at KBW Inc., said in an interview. ``Ken Lewis was clearly disappointed by the performance and the bank's risk management. He is moving quickly to boost earnings for next year.''

The job cuts represent less than 2 percent of the total workforce and involve business lending, treasury services, capital markets and advisory service employees, the bank said.

Bank of America fell 30 cents to $47.48 in New York Stock Exchange composite transactions and dropped as low as $47.20 in extended trading. The shares have lost 11 percent this year. Third-quarter profit fell 32 percent to $3.7 billion, the bank said last week.

Strategic Review

``While some of these changes are a direct result of our underperformance, others have been contemplated for a number of months as we looked at how we could operate more effectively,'' Lewis said in the statement.

The bank has started a review of the investment bank to make it more effective, the statement said. The study is likely to be complete by early next year, Chief Financial Officer Joe Price said last week.

Moynihan, 48, joined the bank in 2004 when it acquired Boston-based FleetBoston Financial, where he led the brokerage and wealth management business. He joined Fleet Financial Group in 1993 as deputy general counsel. He is a graduate of Brown University and Notre Dame Law School.

Classmates in Training

Taylor, 60, became head of corporate and investment banking in 2005. He joined the former NCNB Corp. in 1969 and was in the same training class as Lewis. Taylor was president of Florida banking operations for most of the 1990s. After the 1998 merger with BankAmerica, he moved to San Francisco to run consumer and commercial banking in the California-based bank's territory. He returned to Charlotte as president of the consumer and commercial bank in 2001.

Keith Banks, 51, president of the bank's asset management organization, Columbia Management, will succeed Moynihan as president of global wealth and investment management. He will be based in Boston