Bank of America Corp., the second- largest U.S. bank, will cut about 7,500 jobs after buying Countrywide Financial Corp.
The purchase is expected to be completed July 1, Charlotte, North Carolina-based Bank of America said today in a statement. The reduction over the next two years -- equal to about 2.9 percent of the combined staff -- will occur where jobs overlap ``throughout the country,'' the bank said. Notices will be sent during the third quarter.
Countrywide's shareholders yesterday approved Bank of America's takeover, originally valued at about $4 billion. The vote cleared the way for a bailout of the biggest U.S. mortgage lender, which became a symbol of the subprime boom and bust. Calabasas, California-based Countrywide employed about 50,000 people at the end of the first quarter, according to Bloomberg data. Bank of America's staff was 209,000.
Bank of America fell 6.8 percent to $24.81 in 4:15 p.m. New York Stock Exchange composite trading. Countrywide slipped 3.5 percent to $4.42.
Today's announcement may finally quell speculation that Bank of America plans to back out the deal because Countrywide has lost money since the accord was announced in January. The value of the bank's all-stock bid for Countrywide has fallen to $2.67 billion as investors became more concerned about the weak U.S. economy and whether the mortgage company's losses would cripple Bank of America's earnings.
Gap Narrows
The gap between Countrywide's stock price and the value of the Bank of America shares that investors will receive narrowed to 2.2 percent today, reflecting more confidence that the takeover will happen. The spread was 5.6 percent yesterday and as much as 11 percent last week.
Countrywide is based in Calabasas, California. The world's biggest financial firms have already announced more than 82,000 job cuts after posting $400 billion in writedowns and credit losses tied to the U.S. housing slump.
The purchase is expected to be completed July 1, Charlotte, North Carolina-based Bank of America said today in a statement. The reduction over the next two years -- equal to about 2.9 percent of the combined staff -- will occur where jobs overlap ``throughout the country,'' the bank said. Notices will be sent during the third quarter.
Countrywide's shareholders yesterday approved Bank of America's takeover, originally valued at about $4 billion. The vote cleared the way for a bailout of the biggest U.S. mortgage lender, which became a symbol of the subprime boom and bust. Calabasas, California-based Countrywide employed about 50,000 people at the end of the first quarter, according to Bloomberg data. Bank of America's staff was 209,000.
Bank of America fell 6.8 percent to $24.81 in 4:15 p.m. New York Stock Exchange composite trading. Countrywide slipped 3.5 percent to $4.42.
Today's announcement may finally quell speculation that Bank of America plans to back out the deal because Countrywide has lost money since the accord was announced in January. The value of the bank's all-stock bid for Countrywide has fallen to $2.67 billion as investors became more concerned about the weak U.S. economy and whether the mortgage company's losses would cripple Bank of America's earnings.
Gap Narrows
The gap between Countrywide's stock price and the value of the Bank of America shares that investors will receive narrowed to 2.2 percent today, reflecting more confidence that the takeover will happen. The spread was 5.6 percent yesterday and as much as 11 percent last week.
Countrywide is based in Calabasas, California. The world's biggest financial firms have already announced more than 82,000 job cuts after posting $400 billion in writedowns and credit losses tied to the U.S. housing slump.
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