BankAmerica Corp. said Friday that it will cut more than one-fourth of the jobs in its retail brokerage groups during the first quarter.

The layoff announcement-affecting 300 brokers and support employees out of 1,070 nationwide-was prompted by changing market conditions and the need to eliminate overlaps at the recently merged company, a spokesman said.

The volatility that has shaken markets since summer has "dictated that we improve the operating efficiencies by realigning resources with those of other bank business initiatives," the spokesman for the Charlotte, N.C., banking company said. Some of those laid off will be placed elsewhere in the bank, he added.

Observers said the layoffs could be a harbinger for other bank brokerages as they cope with increasingly skittish investors. Sales of stock mutual funds, which had fueled revenues at many institutions, have been off sharply since August.

Some nonbank brokerages have already wielded the ax, among them Merrill Lynch & Co., which shed 5% of its work force in recent months.

"This is a time to pull back in areas that you may have let ride over the last couple of years," said Harold R. Schroeder, a bank analyst at Keefe, Bruyette & Woods Inc. in New York. Consolidation, he added, is clearly another factor for BankAmerica.

Its Sept. 30 merger with NationsBank Corp. made BankAmerica one of the top 15 broker-dealer firms in the country, according to the Securities Industry Association. NationsBank brought 670 brokers and support employees to the match; BankAmerica, 400.

One source said some of the layoffs may have been a response to losses at the former BankAmerica.

Its brokerage had been booking an average of $15 million in pretax profits per quarter before the company switched to a new compensation structure that featured no-load mutual funds, said this source, who requested anonymity.

The brokerage lost about $10 million per quarter from the fourth quarter of 1997 through the second quarter of this year, the source said. BankAmerica did not respond to request for comment on this point.

The BankAmerica spokesman said the company is working out how to combine its two retail brokerages, NationsBanc Investments Inc. and BA Investment Services.

When merged, the brokerage unit will report to Henry Rose, who currently heads the NationsBanc side, the spokesman said. James P. Albo heads the BankAmerica counterpart.

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