Friday, February 02, 2007

Banks Profit From Job Cuts

From yesterdays Globe and Mail is this update on the BMO job cuts. Just doing what the other fellas do...And as usual the job cuts are the direct result of the falling rate of profit. The greedy want more and more....

Taking actions similar to those of new CEOs when they arrived at CIBC, Toronto-Dominion Bank and Royal Bank of Canada, BMO announced it will chop 3 per cent of its 35,000-strong work force through cuts "across all support functions."

BMO's stock market performance has lagged rivals in the past year, as revenue stalled and costs rose. In contrast, CIBC stock soared in part because of newly-named CEO Gerry McCaughey's took layers of management out of the organization, trimming 950 jobs and cutting expenses by more than $250-million a year.

RBC, another stock market leader, took a $192-million charge in 2004 when CEO Gordon Nixon reworked the way the bank was run and shed 1,600 head office jobs.

Analysts also said the cuts show that in the future, the Canadian banks face increasing challenges as they try to sustain double-digit profit growth. BMO's earnings grew 11-per-cent last year, to a record $2.7-billion.

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