Bank of America Corp (NYSE:BAC) sending 1,000 Beachwood workers into the wood
Bank of America Corp (NYSE:BAC) has notified 1,000 workers at its Beachwood offices that they will be moved out of the company with effect from 31 October. The bank will be shuttering its consumer and mortgage banking office there. A 55-strong office in Independence as well as a 100-employee strong office in Cincinnati will also be shutting down on the same day. Terry Francisco said that the workers have already been informed about this move.
The affected offices
Of the 1,000 jobs in Beachwood, 650 are in home loan fulfillment and most are in the refinance section. Of the rest, 300-400 are in the customer service segment for the consumer banking division. The Cincinnati and Independence offices are involved in home loans. Severance packages will be provided to all employees. Very few transfer opportunities exist as the North Carolina BAC does not have the any similar operations in the region apart from the Merrill Lynch investment units.
The employees were informed about the downsizing on Thursday. There was a great deal of commotion in the office post the announcement. Some employees were seen shedding tears while many were calling family and friends. Some employees who were approached in the parking lot declined to comment. They said that they were concerned that their severance pay would be held back.
Rising refinancing interest rates
The mortgage unit worked with the customers who were refinancing home-loans. Most were connected to the Home Affordable Refinance Program that had been launched by the government. The spokesperson said that BAC has been in efforts to cut down its mortgage operations. Thursday’s announcement had been primarily driven by the massive increase in mortgage-interest rates.
This had resulted in a significant slowdown in refinancing. The interest rates had increased by over 1% since January and had moved beyond the 4.5% mark. Last year, refinances accounted for 70-75% of home loans across the United States.