Bloomberg News
Banks are practically begging each other to take their employees.
Bank of AmericaBAC +0.42% was so desperate to find jobs for its employees that it invited rival CitigroupC -0.27% to a job fair to interview employees, according to an executive.
Banks have been laying off thousands of workers over the last few months as a slump in refinancing activity leads to lower mortgage-banking income. At Bank of America, the layoffs are compounded by a shrinking delinquent home loan unit, which at its height handled 1.4 million bad loans, mostly from its 2008 deal to buy Countrywide Financial. Today, the unit manages about 400,000 bad loans.
The bank is aiming to cut more than 4,000 jobs in the fourth quarter and already notified about 1,200 employees this week that they were being let go, people familiar with the matter have said.
Executives say they are trying to find other options for their workers.
The bank in 2009 and 2010 had to bring on tens of thousands of full time employees and contractors to handle processing some 40,000 bad loans a month. Today, the bank handles about 5,000 to 10,000 bad loans a month, said Ron Sturzenegger, who runs a Bank of America unit that services bad loans.
“Attrition has been our friend because it has lessened the impact on our employees,” Mr. Sturzenegger added.
But the unit’s attrition rate, which is between 18% to 20% according to Mr. Sturzenegger, hasn’t been fast enough to compensate for the shrinking number of bad loans. He cut headcount by 45% to 32,000 so far this year, with most cutbacks coming from contractors.
The bank tried to save employee jobs in March when it agreed to sell a BofA location in Getzville, N.Y., to M&T, the Buffalo, N.Y.- based bank. The facility had a total of 1,100 jobs and M&T took on about 600 employees, as part of the terms of the deal. Bank of America also held a career fair there for employees, bringing rival Citigroup as well as other companies like IBMIBM -0.82%, Mr. Sturzenegger said. It was a unique situation, he explained, reflecting the bank’s desperation to find other posts for its workers.
In August, the bank said it was letting go of 1,700 mortgage employees. The company announced a career fair  for employees let go in Beachwood, Ohio, hosting 57 employers, said a spokesman. Four hundred employees signed up to attend. A spokesman said the fairs are ongoing and called participation “strong,” but wouldn’t say how many employees have received offers.
More recently, on Thursday, 500 employees in Hunt Valley, Maryland, who work on loan fulfillment were told the bank is converting the site to handle consumer banking services, added a bank spokesman.
At the same time, the bank is looking to hire 600 new employees due to new regulatory requirements, Mr. Sturzenegger said. That includes about 200 jobs the bank must add as part of a settlement with New York Attorney General Eric Schneiderman. The bank agreed last month to add employees nationwide to serve as a point of contact for homeowners seeking relief as part of a $25 billion national mortgage settlement.