November 29, 2023


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Big banks cut thousands of jobs, more layoffs coming

4 min read
Big banks cut thousands of jobs, more layoffs coming

Five big banks cut a combined 20 thousand jobs in 2023

The largest American banks have been quietly laying off workers all year — and some of the deepest cuts are yet to come.

Even as the economy has surprised forecasters with its resilience, lenders have cut headcount or announced plans to do so, with the key exception being JPMorgan Chase, the biggest and most profitable U.S. bank.

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.

The moves come after a two-year hiring boom during the Covid pandemic, fueled by a surge in Wall Street activity. That subsided after the Federal Reserve began raising interest rates last year to cool an overheated economy, and banks found themselves suddenly overstaffed for an environment in which fewer consumers sought out mortgages and fewer corporations issued debt or bought competitors.

“Banks are cutting costs where they can because things are really uncertain next year,” Chris Marinac, research director at Janney Montgomery Scott, said in a phone interview.

Job losses in the financial industry could pressure the broader U.S. labor market in 2024. Faced with rising defaults on corporate and consumer loans, lenders are poised to make deeper cuts next year, said Marinac.

“They need to find levers to keep earnings from falling further and to free up money for provisions as more loans go bad,” he said. “By the time we roll into January, you’ll hear a lot of companies talking about this.”

Deepest cuts

Goldman firings

Pedestrians walk along Wall Street near the New York Stock Exchange in New York.

Michael Nagle | Bloomberg | Getty Images

A key factor driving the cuts is that job-hopping in finance slowed drastically from earlier years, leaving banks with more people than they expected.

“Attrition has been remarkably low, and that’s something that we’ve just got to work through,” Morgan Stanley CEO James Gorman said Wednesday. The bank has cut about 2% of its workforce this year amid a protracted slowdown in investment banking activity.

The aggregate figures obscure the hiring that banks are still doing. While headcount at Bank of America dipped 1.9% this year, the firm has hired 12,000 people so far, indicating that an even greater amount of people left their jobs.

Citigroup’s cuts

Wall Street layoffs will be selective but broad-based, according to sources, says Hugh Son

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– CNBC’s Gabriel Cortes contributed to this article.


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