I was interviewed in today’s Wall Street Journal about Bank of America’s recent downsizing announcement. Here are some excerpts from the article:
Rumors of massive layoffs had been rippling through the ranks for months, according to one senior analyst at Bank of America. “A lot of people are really scared about what’s going to happen,” he said. “I don’t know anybody who’s not looking [for another job].”
He said managers have tried to send short notes to reassure employees but it seems they are nervous about their own positions. “They say it’s going to be 30,000 over the next couple years. Does that mean that for the next several years we’re supposed to wait for our number to be called?”
A Bank of America spokesman declined to comment.
Still, multiple announcements of layoffs tend to compound employee stress levels, said Aneil Mishra, managing partner of Total Trust Coaching & Consulting, a human resources consultant. “The more often you do it, the more brittle employees become,” he said.
Bank of America announced today that it would downsize by another 30,000 employees over the next few years, in addition to the more than 6,000 already downsized this year. This means that when this current downsizing effort is completed, it will have shed almost 90,000 jobs, ore more than 27% of its employees, since 2008 by our count.
Original Post 2-10-2009:
I have many former students who work for Bank of America (or did, as some have already been let go), and so I am always interested in knowing what is happening at the bank. One of my former students alerted me to this article in today’s Charlotte Observer:
Two months since Bank of America Corp. announced major companywide layoffs, the cuts are rippling through Charlotte, but it’s still unclear how many jobs will be lost in the bank’s headquarters city.
The bank last month filed a notice with state officials saying it would eliminate 139 workers in Ballantyne, but beyond that it has declined to confirm reports of layoffs, or to say how many workers will be affected here. The 35,000 job cuts announced in December are related to the Jan. 1 purchase of Merrill Lynch & Co. and a weak economy. They will take place over the next three years.
Current and former employees say job cuts began in December and have intensified in recent weeks, hitting a variety of divisions and levels, but even those inside the company say it’s difficult to gauge the total impact. The quiet nature of the cuts has eroded morale and left many nervous about their own posts, they say.
Not surprisingly, the way in which the layoffs are being conducted are negatively affecting employee morale and productivity:
Bank of America employees say layoffs are happening quickly, with workers often having their access to bank systems immediately cut off. Sometimes e-mails circulate with farewells from workers shortly before they leave. Sometimes employees learn a co-worker is gone after the fact. “Nobody knows what’s going on,” said one Charlotte employee. “People leave their desk, come back, and then people applaud when they walk out.”
Said another: “It’s almost like a bomb went off and you don’t know till afterward who’s alive and who’s dead.”
Employees are leaving so abruptly that they are leaving behind unfinished work. In the past, workers were given more advance notice they were losing their job and given time to search for other positions within the company.
The cuts have spurred resentment among Bank of America employees against Merrill workers. Some think Merrill workers are getting preference for jobs, even though their company is the one being bought out, and they’re angry that their bonuses have been cut while Merrill paid bonuses in December.
As my former student told me today, it’s “hard times here at the bank — everyone is on pins and needles, presently company included. Trust, well it’s essentially evaporated.”
Our published research shows exactly that. When leaders are not transparent about the purpose for and the process by which downsizing/layoffs are to occur, employee morale and trust are negatively affected severely, which makes it exceedingly difficult for them to take the necessary initiative and actions to improve the organization and avoid future layoffs.