Bank of America Layoffs Coming: Report

Updated from Monday, Sept. 20

NEW YORK (TheStreet) -- Bank of America (BAC) is preparing layoffs in its capital markets business, according to a report by Charlie Gasparino of Fox Business.

Managers in certain "profit-challenged areas" have been told to cut about 5% of staff, according to the report. A call to global markets chief Tom Montag and an email to bank spokespeople were not immediately returned.

The New York Times reports the layoffs are expected to affect several parts of Bank of America's investment banking unit, including areas like equity and fixed-income trading and investment banking.

The Times says several hundred jobs in the investment banking unit will be trimmed this week. The newspaper cited interviews with several employees.

Bank of America posted second-quarter trading revenue that, according to a Sandler O'Neill report in July, "were well below our already reduced estimates." The 55% sequential decline in investment bank trading revenue compared to declines of 36% at Citigroup (C) and JPMorgan Chase (BAC), the Sandler report stated.

But Bank of America executives aren't only ones bracing for bad news, according to the Fox report. It also states that Morgan Stanley (MS) senior executives have been warned they can expect bonuses that are "sharply lower" from last year. New CEO James Gorman has already vowed publicly to reign in pay at the bank, that was higher than most peers last year by certain measures. A Morgan Stanley spokesman had no comment.

Gasparino also writes that Goldman Sachs (GS) bonuses could drop 10% from last year. Goldman spokesmen did not immediately respond to an email message.

-- Written by Dan Freed in New York.

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