By Vicki Needham - 09/12/11 07:22 PM EDT
Monday's announcement comes hours before President Obama is set to send his $447 billion jobs proposal to Capitol Hill. The plan includes a work-sharing program designed to slow layoffs, giving businesses the option to reduce hours with unemployment benefits making up the difference.
The job cuts are the largest since the U.S. Postal Service announced 30,000 layoffs last year. In 2009, General Motors made 47,000 cuts and the failure of retailer Circuit City resulted in 34,000 job losses, according to Chicago-based Challenger, Gray & Christmas Inc., which tracks daily layoffs.
Besides Bank of America, through the first eight months of the year, the largest layoff announcement came from pharmaceutical giant Merck & Co., which reported plans to shed 13,000 workers, also part of a cost-cutting move to keep the company competitive following the expiration of patent protection for some of its drugs.
The third largest cuts this year came from retailer Borders, which couldn't rebound from bankruptcy protection filed earlier in the year and was forced to shutter all of its remaining stores, resulting in 11,000 job losses.
Brian Moynihan, the bank's chief executive, announced the changes in an address to investors in New York.
"We're a much simpler company than we were 24 months ago," Moynihan said.
Bank of America's stock, which has lost half its value this year, was down 1.43 percent through afternoon trading.
Despite the high number of job cuts during a fragile time in the economy's recovery, the layoffs don't top IBM's 60,000 in July 1993, Sears 50,000 in January 1993 or Citigroup's 50,000 in November 2008, only two months after the financial crisis.
The nation's largest bank has increasingly struggled since its 2008 purchase of Countrywide Financial Corp., a firm loaded down with bad mortgages.
The bank faces lawsuits from investors and regulators over those bad mortgages.
Earlier this month, the Federal Housing Finance Agency (FHFA), the federal regulator for Fannie Mae and Freddie Mac, sued 17 banks including Bank of America over those toxic loans.
The job cuts follow changes removal of a layer of the bank's top level of management as well as a realignment.
The latest job cuts will lead to a 10 percent reduction in the bank's work force of 288,000, on top of 6,000 previously announced cuts expected to happen through the end of the month.
The Charlotte, N.C. company said it expects that attrition and the elimination of unfilled roles "will be a significant part of the anticipated decrease in jobs."
Late last month, Warren Buffett's Berkshire Hathaway announced plans to invest $5 billion in Bank of America, providing the bank with a much-need vote of confidence.