Bank of America plans to reduce its consumer banking workforce by thousands more employees, while continuing to add salespeople in a bid to increase revenue, a top executive said this week.
The Charlotte bank has previously said its total consumer banking employee count has fallen nearly 40 percent to 68,400 since 2009, as the bank increasingly looks to serve customers through mobile and online technology instead of branches.
That number “will probably go down to the low 60s,” Thong Nguyen, co-head of consumer banking, said at an investor conference Tuesday, meaning as many as 8,000 jobs could go away.
Nguyen did not give a time frame for the reduction, and a person familiar with the situation said the cuts would come largely through natural turnover.
Bank of America “will continue to reduce the number of employees related to transactions, but then reinvest them back into the sales force,” Nguyen said. “Just to give you an idea, the salespeople used to be 5 percent of our employee base. Today, it’s 30 percent.”
Banks in general are cutting back on teller positions that handle deposits and check-cashing, as consumers increasingly use ATMs and mobile devices for these transactions. These methods also benefit banks because they cost less per transaction.
Bank of America has about 7 million customer contacts in branches per week, but that is going down about 11 percent a year “just because people show up less and less in a branch to make a deposit or a withdrawal because they can do that through an ATM or mobile and online,” Nguyen said.
Under CEO Brian Moynihan, Bank of America has slashed its total branches from about 6,100 to about 4,700, and Nguyen said that number will remain relatively flat going forward. Branches are becoming more sales-oriented, as customers use them less for transactions, he said.
“You used to come to a branch to make a deposit, a withdrawal or payments,” he said. “Now you’re going to use the branch to go in and open a credit card, an auto loan, a mortgage, investments, or have customer service because you have a death in the family or you just moved.”
The nation’s No. 2 bank by assets plans to refurbish branches for these new uses, starting with 1,500 and then 200 to 300 every year, he said. The Observer reported last month that the bank is building its first new branch in the Charlotte area since 2012, and that the South End location will reflect this new approach.
In the consumer bank, total revenue fell 1 percent in 2015 to $30.6 billion from the previous year, but net income increased 5 percent to $6.7 billion on lower expenses and a smaller provision for bad loans.
Bank of America is under pressure to reduce expenses at a time when low interest rates are crimping the profitability of lending. Moynihan has repeatedly said the bank will reduce its employee count over time, including areas that handle problem loans.
In the consumer bank, total revenue fell 1 percent in 2015 to $30.6 billion from the previous year, but net income increased 5 percent to $6.7 billion on lower expenses and a smaller provision for bad loans. The unit accounted for more than one-third of the company’s total revenue.
Bank of America had about 213,000 employees at the end of March. Its Charlotte-area employment has stayed steady at around 15,000, according to the bank.