The economy and its effects on Charlotte

[monsoon]

Keep in mind that unemployment statistics are most often confused with how many people are actually out of work. This isn't the case. The number is simply the number of people who are getting unemployment benefits. When these benefits run out, they are not counted anymore. The problem is a lot worse than stated.

[unc2007lsu]

agreed, its going to be an extremely hard 2009 for a lot of people. The news of GMAC and MS looking for space in Charlotte is good, but won't nearly offset the lose of jobs from Wachovia. The talent pool in Charlotte will be deeper, hopefully attracting even more companies to come here.

[Charlotte_native]

The economy is going to be slow for some time, I can't believe that I saw Goldman Sachs raising there 4th quarter unemployment estimates to 9%!!!! If we hit that level, we are going to be in a world of trouble.

[Charlotte_native]

The news of GMAC and MS looking for space in Charlotte is good, but won't nearly offset the lose of jobs from Wachovia.

[unc2007lsu]

I agree that GMAc and MS would not be able to take on all the lost jobs, but if MS and GMAC want to start banks, this would be the perfect place to do it.

[monsoon]

WCNC led in the 6pm news with the report that BofA is planning to layoff 30,000 people. They didn't have much other information.

[SmellyCat]

^ Yesterday CNBC reported that the BofA/Merrill Lynch merger will result in 10,000 layoffs between the two companies, mostly from Merrill and heavily from the investment bank (where there is the most overlap). Those layoffs will likely take place over the next two weeks.

[tozmervo]

The WBTV article points to CNBC. "Sources" seem to be indicating that the layoff number would be closer to 30,000 based on the amount of $ Ken Lewis wants to wring out. They continue to say that its the investment side that is going to get the brunt of it.

[nyxmike]

The WBTV article points to CNBC. "Sources" seem to be indicating that the layoff number would be closer to 30,000 based on the amount of $ Ken Lewis wants to wring out. They continue to say that its the investment side that is going to get the brunt of it.

[SmellyCat]

Most of the IB jobs are in NYC, correct? Any idea how many people will be affected here in Charlotte?

[Charlotte_native]

Loved those news teasers last night about BofA having 30k layoffs. Turns out most were Investment Bankers, many from Merrill, and mostly in NY. You'd think (I know, I know, can't give them that much credit) that in this economy they'd lay off the alarmist teasers that pan out to be far from what they sounded like.

[monsoon]

I don't think the bank has gone on record and stated where these layoffs are coming from. All they said is they are planning to eliminate $7B in costs. (i.e. labor costs) Ken Lewis has already gone on record as saying that he wants to keep the investment bankers at ML and said they will offer these guys incentives to stay with the bank. They also said they are considering selling off certain assets.

[SmellyCat]

[tozmervo]

I don't think the bank has gone on record and stated where these layoffs are coming from.

[monsoon]

And exactly one year ago, Ken Lewis also said "I've had all the fun I can stand in investment banking". So I'd wouldn't necessarily take what he says for face value.

Logic alone tells you most of the cuts will come from investment banking side. .....

Merrill doesn't have a retail banking arm. BofA does. There should be very little overlap there.

[monsoon]

To be fair, they have also not gone on record about how many they may be laying off. The investment bank information is just as reliable as the 30,000 number at this point. Heck, from what I can tell the 10,000 number is just as reliable. We really don't know anything yet.

[Charlotte_native]

Regardless we don't know anything and the local news presented their teasers as if there were some definitive news on the subject and the ones I saw implied they might be local BofA jobs. What they actually said in their newscast was that they were told most jobs would likely be on the investment banking side and would be Merrill jobs. The safe thing to do with this is not assume anything and not give credence to sensationalistic news teasers by spreading the rumors.

[SmellyCat]

So BofA buys an investment bank and lays off everyone there. Since you say there is no overlap, where is the logic in that? I would think they would get rid of the places they do duplicate with a preference going to current BofA operations.

[monsoon]

.... What they actually said in their newscast was that they were told most jobs would likely be on the investment banking side and would be Merrill jobs. ...

[Charlotte_native]

Still, it is all speculation at this point and I stand by my statements that local news wanted great teasers to scare everyone and right now nothing solid is out there.

[Charlotte_native]

OK, a little more on this from the Observer today. It doesn't seem that anyone has openly said BofA and/or Merrill will cut 30,000 jobs. Lewis won't comment on it (and it seems it was stated in a CNBC report). Earlier a CNBC report had said 10,000 jobs were going quoting from 'unnamed sources'. The number of 30k seems to have come from 'analysts' who heard BofA has plans to trim $7billion or 10% of the companies annual expenses. So this is coming from outside sources, not inside, and from their assumptions. It also says that the $7billion to be trimmed will be attained by 2012 so it isn't necessarily something that will happen right now. They go on to say that BofA's brokerage unit is 'particularly vulnerable' -- but their brokerage unit only has about 2,000 advisors. Someone with BofA, Scott Silvestri, said the bank is evaluating staffing levels from the pending merger and they 'believe' there will be job eliminations they haven't completed their analysis and won't until early 2009. They also say that some of the $7billion hoped to be trimmed might come from renegotiating with vendors and combining office space.

On to this effect on Charlotte, they point out that BofA's investment management division is located in Boston and financial advisors are located across the country. Back-office operations are in 3 'major locations': Charlotte, NY, Rhode Island. Merrill's back-office is in New Jersey. Since this thread is about the economy and its effect on Charlotte, it doesn't appear that this news implies pending large scale job losses from this part of the merger in Charlotte.

[dxartist]

on another note, AT&T is planning to cut 12,000 jobs, ie 4% of its workforce. Anyone know how it affects Charlotte? I think there are people in the Bellsouth Bldg (or whatever it is called these days), but not sure exactly how many.

[monsoon]

I believe that Charlotte is the NC HQ for this company and they also handle billing, repair records, and administration for both Carolinas. When I used to work for them as Ma Bell back in the late 70s, they were one of the largest employers in Charlotte at the time. Maybe 10,000 people. I suspect there are not as nearly many employees now, but they do occupy not one but two significant pieces of property in downtown. (Caldwell street is the other) They also have (or did) a couple of rather large data processing centers at URP.

[SmellyCat]

I believe that Charlotte is the NC HQ for this company and they also handle billing, repair records, and administration for both Carolinas. When I used to work for them as Ma Bell back in the late 70s, they were one of the largest employers in Charlotte at the time. Maybe 10,000 people. I suspect there are not as nearly many employees now, but they do occupy not one but two significant pieces of property in downtown. (Caldwell street is the other) They also have (or did) a couple of rather large data processing centers at URP.

[krazeeboi]

The cuts are going to mainly affect the residential/traditional landline side of things (for obvious reasons). The operations for residential services in Charlotte are located in the office park across from the former site of the Coliseum on Tyvola. So far, from what I've heard, downsizing has occurred in the centers in Louisville and Conyers, GA. I've also heard that AT&T residential operations in the Southeast will only experience 1,000 of the nationwide 12,000 cuts but I don't know how accurate that is.