Bank of America Corp. is preparing to slash 40,000 or more jobs nationwide, a dramatic retrenchment that reflects the deepening woes of the country’s largest bank and the magnitude of the U.S. economic slowdown.

The layoffs will come mainly from the BofA’s sprawling consumer-banking operations.

Bank of America (BofA) hopes to fashion a smaller but more focused company that can withstand the fallout from its disastrous 2008 takeover of mortgage lender Countrywide Financial Corp. in Calabasas. The home-lending unit has run up $30 billion in losses, and faces billions more in potential liability from a barrage of mortgage-related lawsuits.

Federal regulators and private investors allege that Countrywide misled them about the quality of loans and bonds tied to high-risk mortgages bought during the housing boom. Earlier this month, federal regulators sued Bank of America and 16 rivals, contending that the banks sold loans to housing goliaths Fannie Mae and Freddie Mac under false pretenses.