Updated January 13th, 2024 at 13:47 IST

US banking titans slash over 17,000 jobs in 2023

JPMorgan Chase, the largest US lender, defied this trend by expanding its employee base for the third consecutive year.

Reported by: Business Desk
Job cuts | Image:Pexels
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In a tumultuous year marked by dwindling dealmaking and softened borrower demand, major U.S. banks Wells Fargo, Bank of America, and Citigroup collectively downsized their workforces by 17,700 employees, as revealed in their fourth-quarter earnings reports on Friday. The move reflects a strategic response to the evolving economic landscape and challenges faced by the banking industry.

JPMorgan Chase, the largest US lender, defied this trend by expanding its employee base for the third consecutive year. The rest of the banking sector opted for layoffs and a reduction in replacements for departing staff amidst a backdrop of economic uncertainty.

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Persisting challenges in the industry are anticipated, with potential headwinds including weaknesses in commercial real estate and proposed stringent capital rules that could lead to a contraction in lending activities. The impact of these factors on dealmaking and borrower demand remains a focal point for banks.

Throughout 2023, Wall Street businesses encountered difficulties as economic uncertainties weighed on dealmaking activities. Despite the S&P 500 banks index's 7% rise in 2023, it underperformed compared to indexes tracking industrial or consumer discretionary companies.

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Citigroup witnessed a headcount reduction of 1,000, bringing its total employee count to 239,000 in 2023. The bank outlined plans to further cut 20,000 jobs over the next two years through a comprehensive reorganization and other strategic adjustments.

Bank of America and Wells Fargo witnessed a contraction in their workforces by approximately 2% and 5%, respectively, during the past year. In contrast, JPMorgan increased its employee count by more than 16,200, continuing its upward trajectory for the third consecutive year, fueled in part by the acquisition of failed lender First Republic Bank in May.

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Goldman Sachs and Morgan Stanley are scheduled to disclose their latest headcount figures next week, having already cut over 4,300 jobs by September-end compared to the previous year. In 2023, Goldman Sachs implemented its most significant round of layoffs since the 2008 global financial crisis. The bank's CFO, Denis Coleman, indicated in October that they were in a position to make "selective investments" in headcount.

(With Reuters inputs)

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Published January 13th, 2024 at 13:47 IST