Well, the bad news is Bank of America said today it will cut roughly 7,500 jobs after it takes over Countrywide Financial next Tuesday.
But the good news is the merger looks like it will actually happen, despite much speculation from analysts, investors, and the general public.
The staff reduction will occur over the next two years, in areas of the combined company where the merger creates redundancies, e.g. home lending, management.
So does this mean the Countrywide wholesale team will continue post-merger, considering the fact that Bank of America closed their wholesale division back in December?
That’s unclear, but it will be interesting to see who stays and who goes once the integration begins.
In early September, Countrywide announced that it would cut 12,000 jobs, or 20 percent of its workforce at the time, thanks to rising defaults and reduced production.
According to Bloomberg data, the mortgage lender employed about 50,000 as of the end of the first quarter, while Bank of America’s staff totaled 209,000.
Yesterday, Countrywide shareholders approved the takeover bid as several state attorney generals took aim at the Calabasas, CA-based mortgage lender for its so-called deceptive lending practices.
Oh and there’s more bad news.
Because Bank of America stock has slipped nearly 40 percent since the merger was announced back in January, the takeover price is only valued at about $2.6 billion now, far from the original $4 billion, but I suppose it beats bankruptcy.