In the aftermath of the 2008 financial crisis, Brian Moynihan contributed significantly to the restructuring of Bank of America by laying off employees. However, his firm has recently adopted a new approach to managing its employees. It increased the minimum wage for its employees, provided them with stock and cash bonuses, and improved their benefits. While Goldman Sachs and Morgan Stanley have cut workers recently in preparation for a possible economic downturn in 2023, Moynihan and his CFO have stated that they do not need layoffs. However, the bank will still reduce its headcount because of industry-wide revenue pressures. “We don’t lay off people, but we have the ability to reshape our headcount pretty quickly just by the turnover that occurs,” Moynihan said Tuesday during a financial conference.
In other words, he said Moynihan would allow positions to go unfilled as employees voluntarily depart, moving people around and retraining them as needed. Moynihan said the company’s headcount has bounced between roughly 205,000 and 215,000 in recent years. The bank had 213,270 employees as of Sept. 30, about 3,900 more than the year earlier. “We’re up to about 215,000 [employees]; we need to run that back down,” he added. Organizations as large as Bank of America are constantly losing and hiring employees, a churn that adds to expenses. The attrition rate in the industry is typically at least 10% annually. Still, it can be several times higher in more difficult, lower-paid positions such as those in branches and call centers, or in highly competitive areas such as technology, according to an industry consultant. Moynihan has used technology — from consolidating back-end processes to offering updated mobile apps — to help reduce noncustomer-facing employees. He said he expects to continue to do that next year, although strong wage inflation makes the job harder. “It is tedious and hard work and it’s harder when you have the inflationary aspects of what we’re all facing,” he said.