While the recession in the USA is still a long time coming, many major US banks are still making red flags when it comes to staffing.
• US banks are cutting staff
• Economic situation and excessive staffing levels are reasons
• Absolute numbers are only partially meaningful
According to CNBC, the five largest financial houses in the USA – with the exception of JPMorgan – have cut around 20,000 jobs so far this year. Some have further plans Job cuts announced. This means that the clear-cutting in the industry is likely to continue – albeit perhaps covertly.
With the cuts in personnel, the financial institutions are not only reacting to the massive job creation that took place during the COVID pandemic, but also to current economic developments. The interest rate policy of the central banks results in lower consumer demand for certain banking services – so staffing levels are sometimes too high in the mortgage sector, for example. There are also individual reasons that prompt banks to take cost-cutting measures.
Wells Fargo: Job cuts will continue
Wells Fargo, for example, has cut 40,000 jobs since the third quarter of 2020, as CFO Mike Santomassimo emphasized to Reuters. And the end of the road doesn’t seem to have been reached yet given the ongoing increase in efficiency: “I think there’s still more to do, and you can see that in the number of employees,” he added.
Goldman Sachs headcount declines slightly
According to CNBC, the number of employees at Goldman Sachs also fell by around five percent this year. This continued the trend from last year, when there were several rounds of job cuts. However, major job cuts on the scale announced in January are not to be expected, according to the company’s executives in the latest balance sheet presentation. The bank has been “sized correctly,” CNBC quotes the top managers as saying. According to the portal, a person familiar with the plans expects that around 1 to 2 percent of employees will have to leave in the coming weeks – low-performing employees in particular will be affected.
Morgan Stanley complains about “low turnover”
The number of employees at Morgan Stanley has also fallen again. Around two percent of the workforce was cut, which was due in particular to a decline in investment banking activity. One of the reasons for this, according to CNBC, is that job turnover in finance has slowed dramatically compared to previous years, leaving banks with more employees than expected. “The fluctuation was remarkably low, and that’s something we just have to deal with,” emphasized Morgan Stanley CEO James Gorman.
Citigroup and Bank of America with largely stable employee numbers
Citigroup recently had 240,000 employees – so the number of employees remained roughly the same this year. But it shouldn’t stop there, there are significant changes underway, Chief Financial Officer Mark Mason told analysts last week. The finance house has already identified 7,000 job cuts that are linked to $600 million in “repositioning costs” announced so far this year, writes CNBC.
The restructuring of the company’s structure is likely to accelerate this trend and, according to executives, the sale of foreign retail stores will also lead to a further decline in the number of employees in the coming quarters.
At Bank of America, the number of employees has fallen by 1.9 percent this year, which is quite manageable.
Numbers distorted
However, looking at the total number of employees at Goldman Sachs, Wells Fargo and Citigroup has fallen within a relatively manageable range or even remained stable, is misleading. If you take into account that the financial institutions hired employees at the same time, significantly more employees may have left the company than can be derived from purely looking at the absolute number of employees. At Bank of America alone, 12,000 new employees were hired, according to CNBC.
JPMorgan as an outlier in the industry
Meanwhile, there has been a significant increase in jobs at JPMorgan. According to the report, the number of employees increased by 5.1 percent. The financial house had not only expanded the number of its branches and acquired First Republic Bank, but also made investments in technology. We heard from the company that there were still 10,000 job vacancies.
Editorial team finanzen.net
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