Bank of America (NYSE:BAC) began cutting jobs yesterday, the first bank to begin trimming staff amid the current profit downturn that’s expected to last the rest of the year. But that hasn’t stopped executives at the big bank from having a little fun: FOX Business Network has learned that even as people started losing their jobs, the bank’s capital markets arm -- the same department targeted for many of the deepest cuts -- is scheduled to throw a lavish party tonight on the swanky rooftop bar in Manhattan, according to people at the firm.

The party has become a sore spot for some Bank of America employees, already reeling from the somewhat haphazard manner in which the big bank has unveiled the job cuts. As first reported by FOX Business, the bank plans to slash up to 5% of the employees in its capital markets arm, mainly its sales and trading departments and investment banking unit that comprises much of what BofA purchased from Merrill Lynch in 2008.

But the bank’s capital market’s chief, Tom Montag, himself a holdover from Merrill, made no formal announcement about the cuts, blind-siding those employees who in recent days received pink slips. In addition, by cutting the executives now, Montag was able to deprive them of year-end bonuses, another sore spot, executives tell FOX Business.

Case in point: The firm’s research department, where BofA slashed 3% of its workforce yesterday, just as many were planning to attend tonight’s party. “It’s really sad,” said one executive who remains at the firm. “People are disappearing and you think they’re out sick but they’ve really been fired.”

The event is scheduled to be held tonight at a place called 230 Fifth Avenue, atop a 20-story skyscraper in Manhattan, which has been ranked among the best rooftop bars in New York boasting “a luxurious and sexy 8,000 square foot” space, a “fully enclosed Penthouse Lounge with seating for up to 600 guests” and “a '1940s modernist' décor” with “breathtaking panoramic views of the Manhattan skyline.”

While other troubled Wall Street firms like Citigroup (NYSE:C), Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS) have held events there, officials at Bank of America are clearly sensitive to the notion that the bank, which received massive amounts of taxpayer bailout money in 2008, is partying with government bailout money while it slashes jobs. Jessica Oppenheim, a spokeswoman for Bank of America, first denied that any event is taking place or that company money is being used to finance a party amid the layoffs.

But later she conceded that the company is paying for “networking event” that was scheduled for last week, and then was postponed. She declined to say when the event will take place.

According to an executive at BofA, about 150 people are scheduled to attend the party that will include mostly sales people at the bank and traders.

“Maybe people can network at the party to get a job,” sneered the executive who is planning to attend.

Bank of America is one of the big banks that are expected to report sharply lower earnings as Wall Street profits begin to erode -- a trend that expected to continue through the rest of the year. Like all firms, BofA is suffering from lower trading volumes, and investors are hoarding more cash rather than putting it to work in the markets.

But unlike firms like Goldman, BofA continues to hold toxic assets on its balance sheet, meaning if the economy takes a turn for the worse as some economists predict, its earnings could be further squeezed in the months ahead. In fact, analyst Dick Bove is predicting that the bank will announce a “sizable loss” for the third quarter of 2010.

That’s why people at the bank tell FOX Business that while the BofA was the first bank to begin slashing jobs amid the profit declines, the cuts are just the beginning both at Bank of America and elsewhere on Wall Street. Already senior executives at Morgan Stanley and Goldman Sachs are alerting employees that they should expect much lower bonuses this year than last year.

“On one hand people are pretty bummed about the job cuts,” said one BofA executive. “On the other hand they understand the bank isn’t making that much money.”