BofA Layoffs - Cuts to Investment Banking

Investors are anxiously awaiting the earnings call

Here we go... 𝗕𝗮𝗻𝗸 𝗼𝗳 𝗔𝗺𝗲𝗿𝗶𝗰𝗮 𝘄𝗶𝘁𝗵 𝗹𝗮𝘆𝗼𝗳𝗳𝘀 𝗮𝗴𝗮𝗶𝗻. Been calling this since last November. It's been in the cards since May of 2024 in fact. They started prepping for this last year - long before most people realized what was coming.

150 junior bankers? This is only the start. The job market in finance is tightening. BofA earnings report will be telling but I am gonna say it right now... they are positioning for a leaner, more automated future. Their hiring freeze into Q1 2025 suggests they’re in preservation mode, not growth mode.

And now, we’ve got $957B in commercial real estate debt maturing in 2025. I bring this up for a reason.

That’s 20% of all outstanding commercial mortgages.

And it’s coming due in an environment where refinancing at today’s rates is near impossible for many borrowers.

What Happens When the $957B in CRE Debt Hits?

Honestly ya’ll… not all of this debt is getting refinanced at 8% interest. Office vacancies are at record highs, especially in cities like San Francisco, NYC, and Chicago. Lenders are already cutting back on commercial real estate exposure. Distressed sales are starting to hit the market at 30-50% discounts.

BoA’s CRE Exposure is a MASSIVE signal to investors:

Total CRE Loans: As of the second quarter of 2024, BoA held approximately $86.57 billion in CRE loans, ranking third among U.S. banks.

In December 2024, BoA purchased nearly $990 million in multifamily CRE loans from HomeStreet Bank, so yes, they are in active participation in the CRE market.

BoA’s Strategic Positioning:

The very fact that Bank of America is making these workforce adjustments and strategic loan acquisitions, tell us they are aware of the coming CRE market shifts. Fingers crossed they can mitigate risks on these evolving market conditions.

But all in all… what does BoA’s workforce data tell us?

• They already knew.

• They acted early.

• They’re positioning for what comes next.

I digress… back to the layoffs…. L𝗮𝘆𝗼𝗳𝗳𝘀 𝗮𝘁 𝘁𝗵𝗲 𝗠𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁 / 𝗗𝗶𝗿𝗲𝗰𝘁𝗼𝗿 𝗹𝗲𝘃𝗲𝗹𝘀 𝗺𝗮𝘆 𝗰𝗼𝗺𝗲 𝗻𝗲𝘅𝘁.

January-February 2025 shows fewer Director/VP-level exits, which means they might have already front-loaded those layoffs in Q4 2024. If junior bankers are being cut now, the next move is thinning middle management (Managers, Directors)

And yes, deal volumes are falling below expectations in the first half of the year. The interesting part to me is that they’re still hiring in compliance, legal, and risk management, but growth roles are gone. Smart in the risk department…worrying on the rest.

If they’re not hiring dealmakers, it means they don’t expect deal flow.

BoA isn’t ramping up lending or M&A activity. Which means no major hiring in Q1 2025 -- they aren’t expecting a rebound anytime soon. Their focus is lean operations, managing risk, and avoiding exposure to bad debt.

Hiring will continue to shrink in credit & wealth management and it could signal BoA is tightening lending due to market concerns. This aligns with recent Fed uncertainty, and investors should watch upcoming rate decisions closely.

𝗜𝗳 𝗕𝗼𝗔 𝗶𝘀 𝗿𝗲𝗱𝘂𝗰𝗶𝗻𝗴 𝗵𝗲𝗮𝗱𝗰𝗼𝘂𝗻𝘁 𝗶𝗻 𝗰𝗹𝗶𝗲𝗻𝘁-𝗳𝗮𝗰𝗶𝗻𝗴 𝗿𝗼𝗹𝗲𝘀, 𝗶𝘁 𝗺𝗲𝗮𝗻𝘀 𝗹𝗲𝗻𝗱𝗶𝗻𝗴 𝗮𝗻𝗱 𝗰𝗮𝗽𝗶𝘁𝗮𝗹 𝗺𝗮𝗿𝗸𝗲𝘁𝘀 𝗮𝗰𝘁𝗶𝘃𝗶𝘁𝘆 𝗺𝗶𝗴𝗵𝘁 𝘀𝗹𝗼𝘄 𝗶𝗻 𝟮𝟬𝟮𝟱 - 𝗲𝘅𝗽𝗲𝗰𝘁 𝗲𝗮𝗿𝗻𝗶𝗻𝗴𝘀 𝗮𝗱𝗷𝘂𝘀𝘁𝗺𝗲𝗻𝘁𝘀.

Between JPMorgan and Goldman Sachs layoffs as well... this is just the start.

Let’s face it…. If hiring doesn’t pick back up by mid-2025, expect further earnings compression, slower loan growth, and possible asset sales to maintain profitability.

This is where investors need to start asking ‘Is this just efficiency - or is BofA bracing for something bigger?’

Investors are watching hiring trends in Q2. I am working on reports for several of them so they know the signals. If BofA doesn’t reverse course, banking stocks could be in for a correction. Because basically if BofA doesn’t start refilling leadership roles by mid-2025, we can expect continued cost-cutting instead of expansion - AKA - something that could be reflected in weaker revenue growth in future earnings reports.

BoA knew. They moved early.

Now we watch for CRE fallout, earnings compression, and which banks kept hiring when they should’ve hit pause.