NEW YORK–The nation’s largest banks have been quietly laying off workers all year, and “some of the deepest cuts are yet to come,” according to a new report.
The one exception is the nation’s largest and most profitable bank, JPMorgan Chase, according to CNBC.
“Pressured by the impact of higher interest rates on the mortgage business, Wall Street deal-making and funding costs, the next five largest U.S. banks have cut a combined 20,000 positions so far this year, according to company filings,” reported CNBC.
The report noted that after a two-year hiring boom fueled by COVID and a surge in activity on Wall Street, the ongoing interest rate increases have cooled the economy and the banks have found themselves overstaffed, especially when it comes to mortgage lending.
CNBC said Job losses in the financial industry “could pressure the broader U.S. labor market in 2024.”
The Deepest Cuts
According to CNBC, the deepest reductions have been at Wells Fargo and Goldman Sachs, institutions that are wrestling with revenue declines in key businesses. They each have cut roughly 5% of their workforce so far this year, and Wells Fargo has cut 50,000 employees over the past three years.
While Citigroup's staff figures have been stable at 240,000 this year, CNBC said there are significant changes with the bank’s CFO saying it has already identified 7,000 job cuts linked to $600 million in "repositioning charges" disclosed so far this year.
CNBC noted that the aggregate figures “obscure” the hiring that some banks are still doing, pointing out, for instance, that headcount at Bank of America dipped 1.9% this year, but BofA has hired 12,000 people so far.
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