Countrywide Merger to Cut 7,500 Jobs
Bank of America said its absorption of Countrywide will eliminate 7,500 jobs over two years. The figure reportedly amounts to 12.5 percent of the combined work force.
The purchase is slated to close July 1, after Countrywide shareholders signed off on it Wednesday.
"Most of the reductions will occur in instances where the two companies have significant overlap such as staff support," the bank said. "Bank of America will continue to monitor market conditions and make adjustments as appropriate."
Countrywide loan originations and retail banking services that overlap with Bank of America's branch network are likely to see big cuts, Keefe, Bruyette & Woods analyst Frederick Cannon told the Los Angeles Times. But the business of servicing mortgage loans, including delinquent ones - where Countrywide is the nation's largest player - will require added staffing due to growing levels of problem loans, Cannon said.
The merging companies employ about 60,000 people in their home-loan and insurance businesses. Countrywide's employment peaked at 61,586 a year ago but fell to 50,169 as of February.
B of A said the layoffs will begin in the third quarter, and will include severance packages.