In the midst of a lawsuit from American International Group (AIG) and after seeing its shares plunge by almost 50 percent since January, Bank of America says it will lay off 3,500 employees this quarter and could shed as many as 10,000 jobs in the future in its effort to cut expenses. 

In a memo obtained by the New York Times, Bank of American chief officer Brian T. Moynihan said he wants to cuts quarterly expenses by $1.5 billion. The 10,000 layoffs would amount to about 3.6 percent of its 280,000-person global workforce. The firings are part of a broad restructuring effort.

Bank of America lost about a

third of its market value in one day after AIG, the largest insurance company in the U.S., brought its $10 billion mortgage fraud lawsuit forward in early August. AIG is accusing the bank of misrepresenting mortgage backed securities.

But the lawsuit is only the latest episode in a long narrative of trouble for the financial institution.

From the New York Times:

Even more than its large rivals, Bank of America has been battered particularly hard by the bursting of the housing bubble and the surge in foreclosures. It has already suffered tens of billions in losses tied to its disastrous acquisition in 2008 of Countrywide Financial, the subprime lender that has come to epitomize the excesses of the housing boom of the last decade.

Investors are also pressing the bank to buy back billions of dollars in securities it assembled from mortgages that later soured. In June, it agreed to pay a group of investors including Pimco, BlackRock and the Federal Reserve Bank of New York $8.5 billion to settle a portion of these claims.

Bank of America has been the subject of much scrutiny regarding its role in the 2008 financial crisis, which had its spark in the mortgage-backed securities market. In October 2010, Bank of America aknowleged it had made mistakes on thousands of foreclosure cases. 

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