Bank of America's charts explaining why it resorted to job cuts

Bank of America is cutting heads. As we've reported, it's cutting junior bankers, it's cutting senior bankers and it's cutting specialist equities salespeople.

Given that BofA has long had a mantra of avoiding cuts by gently freezing hiring and waiting for natural staff attrition to take its course, the layoffs seem to have taken some people at the bank by surprise. One associate in New York said he had no idea that they were coming.

However, charts included in Bank of America's annual report - released this week - make the cuts look inevitable.

As the chart below shows, staff turnover across Bank of America was 8% last year and 8% in 2023. This was only slightly higher than the record low of 7% staff turnover at the bank at the height of the pandemic, and was well below the norm of 12%+ turnover in most years.

People just aren't leaving.

Staff turnover and employee satisfaction at Bank of America 

Source: Bank of America 

In another chart, Bank of America helpfully breaks out which regions and demographics are most prone to staff turnover, along with the cohorts it mostly hires externally and those it nurtures in-house. 

As this chart below shows, BofA says that by nationality its Asian staff are the least likely to leave. People with two or more nationalities are a lot more likely to quit than the rest.

Bank of America's staff turnover and external hiring by region and ethnicity

Source: Bank of America 

The implication of the chart above is that outside of America, Bank of America doesn't really do much in the way of external hiring these days. Instead, it grows a lot of its staff in-house, presumably by recruiting them as graduates. This is especially so in Canada, Latin America and Europe, Middle East and Africa. Those people stick around.

If it wants to cut headcount painlessly, therefore, Bank of America has a handful of options. It can hire fewer graduates. It can increase staff turnover by becoming the sort of place people want to leave. It can hire fewer people in America. 

Or, it can cut headcount painfully everywhere, and simply tell people it doesn't need them any more. 

BofA has been trying the painless options. It has cut student hiring: last year, it added 2,000 campus hires, down from 2,500 in 2023. 

However, in 2024 it also added 16,000 experienced hires globally. With staff churn at near record lows, ingesting these new staff risks being a net additive to employee numbers. After waiting for staff turnover to increase, BofA has therefore opted for the painful option and gone for the chop. Who knows, maybe voluntary turnover will increase as a result?

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