It was big news when Bank of America launched its Project New BAC initiative last year -- a plan to significantly cut costs to survive in this new era of banking.

The initial focus was retail and back office operations, and the bank eventually found $5 billion in projected savings, which entails 30,000 job cuts. But CEO Brian Moynihan is not stopping there. Phase two of Project New BAC will look at commercial and institutional units, including the investment bank. While the saving will not be as eye-popping, Moynihan has told analysts that he expects $3 billion in annual savings starting later this year. This will inevitably entail more job reductions.

This is bad news for a staff that has been battered by negative news for years now. But these initiatives are sorely necessary as the bank continues to suffer from declining revenue and a reduced operational footprint, which have combined to strip the bank of the title of largest U.S. domestic bank. The stock declined nearly 60 percent last year, flirting with penny stock status for several months. So far this year, the stock has popped just a bit. Still, given the weak prognosis for additional revenue that you can count on month after month, the bank has little choice but to pare costs aggressively.

With that said, the industry may get a near-term pop from improved trading conditions, a return of deals and on the consumer side and a deal that will help clear up the mortgage uncertainty. Hopefully, we are past the nadir but that’s hard to call now.

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