Jun 27

Bank of America Announces Upcoming Lay-Off of 7,500 Jobs

The Bank of America announced on Thursday that it will cut about 7,500 jobs following their acquisition of mortgage lender Countrywide Financial Corporation.  The deal is targeted for closure on July 1 after shareholders of Countrywide gave the go-ahead on Wednesday.

The job cuts translates to about 12.5 percent of the combined companies’ mortgage, home equity and insurance businesses and will take place over the next two years in locations where the two companies have significant overlap.  Notification to affected employees will be issued starting on the the third quarter of this year.

Countrywide had been the nation’s largest mortgage originator before a spike in loan defaults ravished its business. The current housing slump and credit crisis continues to  provide losses to financial institutions.  Countrywide lost about $1.6 billion in the last 6 months of 2007 followed by another $893 million in the first quarter of 2008.  Numerous lawsuits and investigations are at the center of its lending practices.The deal resulted in shares of the Bank of America tumbling $1.80, or 6.8 percent to $24.81 Thursday while Countrywide shares fell 16 cents, or 3.5 percent, to $4.42.

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