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Bank of America to eliminate 3,500 jobs

Bank of America Corp. is cutting 3,500 jobs, the latest sign that the banking industry is becoming smaller, simpler and less profitable.

It's quite a transformation from the go-go days of five or six years ago. Then, big banks were reaping outsized profits from large bets on risky trading and complicated investments that eventually backfired, fueling the financial crisis.

The cuts confirmed Friday by Bank of America follow layoffs announced this summer at Goldman Sachs Group Inc., Bank of New York Mellon Corp., State Street Corp. and other financial institutions.

And though banks also laid off thousands of workers in 2008 and 2009, analysts say it's different this time: Many of the banks are posting profits right now, so their layoffs indicate permanent structural changes rather than temporary cuts in response to a weak economy.

Bank of America is still cleaning up the exotic mortgages of Countrywide Financial Corp., a California-based lender it bought in the summer of 2008. The purchase has brought lawsuits, regulatory probes and quarterly losses.

The 3,500 cuts confirmed Friday amount to a little more than 1 percent of the bank's workforce of roughly 288,000. But they follow a string of other layoffs, including 2,500 already announced this year. A spokesman declined to say if the cuts would be concentrated in a particular part of the country, but said they would be spread across most of the business units. -- AP

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