Back in July, Bank of America (BofA) was sitting pretty high, posting 40 percent increase in its second-quarter first-lien mortgage production for 2013, compared to its second-quarter production in 2012. At the time, CEO Brian Moynihan stated, "We are doing more business with our customers and clients, and gaining momentum across every customer group we serve. We must keep improving, but with the consumer recovering and businesses strong, we have lots of opportunity ahead.”
Apparently those plans included two rounds of layoffs within one week. Just last week, BofA announced that they would be firing around 1,000 employees due to a reduction of Cleveland-area mortgage servicing. This week, the company plans on eliminating 1,100-plus more employees, which would result to somewhere around 16 mortgage offices being shuttered permanently. This week’s closing and firings, much like last week’s, are said to be completed by the end of October.
Bloomberg is projecting that the layoffs by Bank of America are only the beginning of a massive wave of layoffs from companies like Wells Fargo and JPMorgan. Both Wells Fargo and JPMorgan also posted record profits last year, but have both been slowly letting mortgage personnel go since the beginning of the third quarter. Bloomberg is projecting that Wells Fargo might eliminate upwards of 15,000 workers by 2014. “We’re pretty much through the refi boom, and we don’t know yet what the purchase business will look like,” Nancy Bush founder of NAB Research LLC, a bank research firm in New Jersey told Bloomberg. “Countrywide was everywhere, so Bank of America’s particular challenge is to go from this hot-mess mortgage company to a rational one.”
While the Wells Fargo layoffs have been mere speculation at this point, the Bank of America layoffs are in the process of happening. BofA has been making headlines over the past few months, as they come under fire from government agencies in court, while being scrutinized outsourcing jobs to India, amidst firing American personnel.