Banking

Contractors face pay cuts, furloughs as Bank of America slashes costs

Charlotte-based Bank of America is cutting spending on contractors.
Charlotte-based Bank of America is cutting spending on contractors. dhinshaw@charlotteobserver.com

In an effort to boost profitability, Charlotte-based Bank of America is cutting back on spending for information technology contractors.

Several workers, who did not want their names disclosed, told the Observer that they were informed last week that their pay rate would be cut by 10 percent and that they would have to take a two-week, unpaid furlough.

“We made business adjustments with some of our strategic partners,” Bank of America spokesman Mark Pipitone said. “This ties directly to our ongoing focus on simplifying the company and delivering for our customers and shareholders.”

Pipitone said it was up to each firm’s discretion to “manage certain aspects of the adjustments.”

It’s unclear how many workers are affected and by how much the bank is reducing its contracting spending to meet year-end goals.

Pipitone confirmed that the changes only affect contractors affiliated with the firm’s global technology and operations unit.

Bank of America declined to provide additional details. Representatives from several IT staffing firms that work with the bank, including Apex Systems, Collabera, TekSystems, either declined to comment or couldn’t be reached.

Under Chief Executive Officer Brian Moynihan, Bank of America has made cost-cutting a priority in an effort to boost profits at a time when low interest rates crimp the margins that banks make from lending.

Industrywide, banks have also been focused on trimming costs, and it’s not unusual for these cuts to come as year end approaches. Wells Fargo on Wednesday said it was laying off 36 mortgage employees in Charlotte and Fort Mill, S.C.

Bank of America’s technology and operations unit, led by Charlotte-based executive Cathy Bessant, has slashed jobs a number of times in recent years, including in mortgage-related functions. The bank employs about 15,000 in Charlotte, including about 6,000 in technology and operations.

Staff writer Rick Rothacker contributed.

Katherine Peralta: 704-358-5079, @katieperalta

Related stories from Charlotte Observer

  Comments