Rising Inflation is reason for job cuts
2023.01.11 14:41
Rising Inflation is reason for job cuts
By Ray Johnson
Budrigannews.com – According to a Reuters count of reported layoffs, global banks are currently eliminating at least 5,000 jobs as volatile capital markets and rapidly rising interest rates put pressure on profits at lucrative investment banking divisions.
Lenders have also created emergency funds to prepare for defaults in light of the rapidly deteriorating economic conditions.
The following major banks have reportedly announced or reported job cuts:
Barclays Bank (London:) A source told Reuters on November 8 that the bank had reduced its workforce in corporate and investment banking by less than 3%, just a few weeks after reporting a 45 percent decline in merger advisory fees.
The British investment bank has performed well in recent quarters, particularly in fixed income trading, but it has been penalized hundreds of millions of dollars for a mistake in the United States in which it sold more securities than was allowed.
Bloomberg News reported on November 8 that Citigroup cut dozens of jobs in its investment banking division as the biggest banks on Wall Street continue to struggle with dealmaking.
While the aggressive action taken by the Federal Reserve and other central banks has sparked fears of a downturn that could impact banks’ loan books in time, the U.S. lender has increased its lending income in tandem with its peers.
CREDIT SUISSE Chairman Axel Lehmann stated on December 2 that Credit Suisse is accelerating cost reductions, confirming a Reuters report, as the bank tries to reduce its cost base by approximately $2.68 billion Swiss francs.
Credit Suisse had previously stated that it would fire some employees. According to Reuters, the reported cost savings are likely to include more job cuts than the first wave of reductions, including in its wealth business.
According to two sources, the bank is cutting about 5% of its private banking staff in Hong Kong.
DEUTSCHE BANK Deutsche Bank In October, the largest bank in Germany reduced the number of employees working in the origination and advisory departments of its investment bank, primarily affecting junior bankers.
According to Reuters, the reductions affected dozens of London and New York employees.
NYSE: GOLDMAN SACHS Goldman Sachs A person who is familiar with the situation told Reuters that the company began laying off employees on January 11 as part of a massive effort to cut costs. About a third of those who were affected belonged to the investment banking and global markets division, according to the source.
On January 9, the source, who requested anonymity, stated that just over 3,000 employees will be laid off. On January 11, a different source confirmed that cuts had begun.
It is anticipated that the Wall Street titan’s long-awaited layoff will result in the largest reduction in employee numbers since the financial crisis.
HSBC Chief Executive Noel Quinn has accelerated plans to reduce the company’s global empire and streamline its management in recent months in response to pressure to increase profits from China’s Ping An Insurance Group, his largest shareholder.
As it reduces the number of chief operating officers it has across a variety of countries and business lines, HSBC, according to Reuters, is laying off at least 200 senior managers.
In addition, the bank announced that it would be selling its Canadian business for $10 billion, effectively eliminating 4,000 employees from its wage bill. On November 30, it also made the announcement that it would be selling its much smaller business in New Zealand and that it would be closing 114 more branches in Britain. This would leave it with only about a third of the branches it had in 2016
A person who is familiar with the plans of MORGAN STANLEY told Reuters that the investment bank cut about 2% of its workforce in December. About 1,600 positions are reportedly affected by the cuts.
NYSE: Morgan Stanley without providing numbers, Chief Executive James Gorman stated on December 1 at the Reuters NEXT conference that is making modest job cuts worldwide.
As strict Chinese lockdown regulations weighed on activity, Reuters reported on November 3 that layoffs were coming at Morgan Stanley, affecting dealmakers in its Hong Kong and mainland China businesses. According to sources, the cuts will go beyond the usual attrition.
Bloomberg News reported in December, citing individuals who were familiar with the bank’s plans, that the lender, Wells Fargo & Company, had eliminated hundreds of jobs in its mortgage business across the United States.
In an email to Reuters at the time, the bank stated, “We regularly review and adjust staffing levels to align with market conditions and the needs of our businesses,” without specifying the number of affected employees or units.
More BlackRock is not lagging behind others and is cutting staff too
