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B of A's plans to cut 3,500 jobs — and perhaps more — are the tip of the iceberg for the entire industry. Expenses are too high and revenues too low for most banks to avoid layoffs.
August 19
With stricter capital requirements threatening to crimp profits, France's three largest banks are trimming overhead by laying off hundreds of workers in the U.S.
Citing French news reports,the online publication Business Banking Review said Tuesday that Societe Generale has already dismissed about 400 employees in the U.S., BNP Paribas intends to eliminate about 300 jobs here, and Credit Agricole plans to shed roughly 1,200 jobs outside of France, including hundreds in the U.S. Each bank has a handful offices in the U.S. in such major cities as New York, Chicago, Houston and San Francisco.
Diony Lebot, the chief executive at Societe Generale Americas, told the French daily Les Echos this week that the layoffs are a result of weakening loan demand in the U.S. and more stringent capital requirements at home. The European Banking Authority recently warned large banks in the region that they will need to raise many billions of dollars in fresh capital to restore investor confidence and better withstand Europe's debt crisis.
The cost of raising that capital could also have factored in the banks' staffing decisions as well. Last month, Moody's downgraded the credit ratings of the three French banks, citing the fragile operating environment for European lenders.
