BofA layoffs latest blow for industry

NEW YORK – Bank of America Corp. is cutting 3,500 jobs, the latest sign that the banking industry is becoming smaller, simpler and less profitable.

It’s quite a transformation from the go-go days of five or six years ago. Then, big banks were reaping outsized profits from large bets on risky trading and complicated investments that eventually backfired, fueling the financial crisis that scorched them and the global economy in 2008.

The cuts confirmed Friday by Bank of America follow layoffs announced this summer at Goldman Sachs Group Inc., Bank of New York Mellon Corp., State Street Corp. and other financial institutions.

And though banks also laid off thousands of workers in 2008 and 2009, analysts say it’s different this time: Many of the banks are posting profits right now, so their layoffs indicate permanent structural changes rather than temporary cuts in response to a weak economy.

Steven Mann, chairman of the finance department at the University of South Carolina’s Moore School of Business, said he’s hearing from MBA grads who have been job-searching for months and haven’t found anything.

“From 2002 to 2007, pretty much everybody who could walk and talk could get a job,” Mann said. “But those days are gone.”

Banks are hiring in some areas. For example, some are adding workers to wade through troubled mortgages and offer new loan terms to struggling borrowers. Some are adding financial advisers to prepare for the wave of retiring baby boomers.

And some bankers are finding jobs outside the big-name banks and taking advantage of the market’s trends. They’re working for government regulators or opening firms to evaluate troubled real estate assets.

But overall, analysts say, the industry is shrinking after years of growing too big, too fast.

U.S. banks employ about 2.09 million people, down from 2.21 million in early 2008.