Bank of America hired 3,000 people despite its hiring freeze
Bank of America achieved a Schrödinger’s like state in the first quarter. On one hand, it had a hiring freeze. On the other, it added 3,000 new people.
How can this be?
Alastair Borthwick, BofA's CFO said yesterday that the 3,000 new people arrived in January by virtue of offers the bank had extended in the final quarter of 2022. As we reported previously, BofA's hiring freeze didn’t apply to candidates already in the bank’s recruitment system: nobly, no offers were rescinded.
Borthwick said the new arrivals meant that Bank of America’s headcount peaked in January. Since then, the freeze has been supplemented by trimming: BofA cut 1,000 positions in the first two weeks of April. It plans to eliminate another 3,000 jobs by the end of the second quarter, excluding the addition of people in its summer intern class.
BofA’s hangover hires in the first quarter included Driss Haj Khlifa, a top euro swaps trader from Morgan Stanley in London, who joined the Paris office on an alleged $2m+ package. Borthwick added that the bank spent the past few years hiring in equities and fixed income and that it had invested in rates hires in particular.
Bank of America’s fixed income sales and trading division performed particularly well in Q1, with revenues rising 29% year-on-year, compared to a 17% declined at Goldman Sachs. Borthwick credited Jim DeMare, BofA's head of global markets and his expanded team, which he said have been "executing at a really high level," adding that they have “just got to keep at it.”
Borthwick didn’t give much indication of where BofA plans to cut the 3,000 people. Some jobs will presumably be eliminated by what he described as “attrition over time” as vacancies aren’t filled. More proactive cuts seem likely in divisions like M&A, where revenues fell both quarter-on-quarter and year-on-year. However, BofA spent the past few years building up its M&A division and might be reluctant to let people go again - it's already been trying to reassign bankers to smaller mid-market deals instead.
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