FRAMINGHAM (08/04/2000) - Bank of America Corp. plans to lay off 9,000 to 10,000 employees in the next 12 months, company executives said this week, but it will expand its investments in technology - including an additional $70 million for e-commerce projects.
Some of the job cuts will come from information technology, said Jay Butler, head of global corporate and investment banking technology at the company.
"They're across the board, so, yes, there will be cuts in the technology area." he said. "But the cuts aren't directed at people who create value for our customers - we're looking at taking layers of management out so that people are closer to the customers and decisions can get made quicker." Butler declined to give further details.
The Charlotte, N.C.-based bank merged with NationsBank Corp. last year, so this is a good time to consolidate and move forward, analysts said.
"The company is a product of many, many mergers over the years," said David Stumpf, an analyst at St. Louis-based A. G. Edwards & Sons Inc. "No one ever stepped back and said, What is the optimal management structure of this new company?' "The layoffs - as many as 10,000 people out of a total of 150,000 employees - should result in significant savings, Stumpf said.
Bank of America will focus additional IT investments in three major technology areas - e-commerce, credit-card and business-to-business payment systems and Web-enabling branches and call centers, Butler said.
Among the benefits of the Web connections, he said, would be the ability for branch and call center employees to call up the same customer data that the customers see when they log on to the bank's Web site.
Butler wouldn't disclose how much the bank spends on e-commerce, but he did say the $70 million would pay out over six months or so.
Bank of America will accelerate existing plans - including deals with dot-coms, such as trading and portfolio management firm Integral Development Corp.'s CFOweb.com, business-exchange infrastructure company Ariba Inc. and Santa Clara, Calif.-based small business portal Biztro.com Inc. Integral and Ariba are both based in Mountain View, Calif.
According to George Barto, an analyst at Stamford, Conn.-based Gartner Group Inc., Bank of America is already ahead of the curve when it comes to online services, and the new focus will help accelerate its adoption of Internet technologies.