(July 31) – “Bank of America Corp. said its move to eliminate 9,000 to 10,000 jobs, or 7% of its work force, by next summer, will save $550 million a year, but much of the savings will be plowed into efforts to boost growth,” reports Carrick Mollenkamp in today’s Wall Street Journal.

“Kenneth Lewis, president and chief operating officer, and James Hance, chief financial officer, said in an interview that the cost savings will be used to bulk up Bank of America’s electronic commerce, marketing and investment-banking units. Mr. Hance also said that the bank remains on pace to increase its operating profit at an expected 12% to 15% rate this year and next. That excludes a third-quarter charge of $300 million to $350 million for severance costs.”

“Factoring out costs of the growth effort, such as opening 10 new private banking offices to pamper wealthy clients, Internet ventures, and investment banking, analyst Andrew Collins at ING Barings estimates the net expense savings to be $150 million. The bank wouldn’t comment on that estimate.”

“A decade of mergers built the bank, formerly known as NationsBank, into one with operations stretching from its Charlotte, N.C., headquarters to offices overlooking the San Francisco Bay. The bank’s biggest acquisition came in fall 1998 when it paid $60 billion to buy BankAmerica Corp. in San Francisco.”

“Mr. Lewis conceded that ‘as we’ve looked at our revenue growth, it’s clearly less than we want.’ So for the past four months, Mr. Lewis oversaw an analysis of the bank that led it to Friday’s announcement of the massive firing. He said it was evident that the bank couldn’t plow money into new arenas and meet its income targets without such a move.”

“Bank of America’s stock fell 25 cents to $46.50 in 4 p.m. New York Stock Exchange composite trading Friday, a day when banks and the broader market also fell. But analysts and institutional investors aren’t convinced the moves will do much to boost revenue or improve earnings.”

“You don’t lay off 10,000 people lightly,” said analyst Thomas Theurkauf at New York investment firm Keefe, Bruyette & Woods. “It’s symptomatic of a fairly tepid revenue outlook for the company.”

The bank has quietly reduced its work force by 24,000 jobs since the BankAmerica acquisition. Friday’s announcement is evidence that the bank wanted to send a signal to investors that it’s serious about cost-cutting.