Some large banks in no hurry to cut staff
2023.01.13 14:41
Some large banks in no hurry to cut staff
Budrigannews.com – (NYSE:) JPMorgan Chase & Co. likewise Bank of America Corp. even though the five largest U.S. companies have grown by 100,000 since the beginning of 2020, they have continued to hire more people as the economy is getting better.
Despite slowing economic growth, the chief financial officers of the two largest U.S. banks stated that they would make selective hires.
During a call with journalists to discuss the bank’s earnings for the fourth quarter, JPMorgan’s Chief Financial Officer Jeremy Barnum stated that the company is “in growth mode” and still hiring.
Although Barnum stated that “there will be different adjustments at different times, and we’re seeing that all across the company,” the bank’s headcount will probably increase modestly.
According to Chief Financial Officer Alastair Borthwick, who spoke with reporters on Friday, Bank of America also continues to hire, particularly in wealth management, while also remaining disciplined with its expenditures. At the end of 2022, it had 216,823 employees, up from 208,248 a year earlier.
He stated, “We don’t have any plans for mass layoffs.”
Despite the fact that other lenders reduced staffing in investment banking and mortgages, the major banks maintained their hiring plans.
Goldman Sachs (NYSE:) was followed by the projections. Inc. laid off more than 3,000 employees in its largest round of layoffs since the financial crisis of 2008, making it the first major bank to do so this year.
NYSE: BNY Mellon Reuters was told on Friday by a person with knowledge of the situation that the company intends to lay off about 3% of its workforce this year.
JPMorgan Chase & Co., Bank of America, Citigroup Inc. (NYSE:), and The Wells Fargo Bank Co, Morgan Stanley, and Goldman Sachs (NYSE:) based on their fourth and third quarter figures, they added over 100,000 jobs from the first quarter of 2020.
Wells Fargo defied the norm by slashing its workforce by nearly 21,000 individuals during the same time frame.
Since the start of the pandemic, Goldman had hired 10,600 people, including staff for Marcus, its consumer banking unit, which was shut down in October after losing money.
Natalie Machicao, vice president at executive search firm Sheffield Haworth in New York, stated, “It is a safe bet to say more banks might follow as banks struggle to make the math work from a bonus perspective and adjust to lower deal volumes.”
She stated, “Other banks are making cuts, with equity capital markets and leveraged finance more deeply affected than coverage or M&A,” pointing out that the cuts were individual or on a smaller scale rather than a significant reduction in force.
Goldman’s cost reductions are a reflection of the company’s reliance on investment banking and trading, which accounted for approximately 65 percent of its revenue in the third quarter of 2022 as a result of the dealmaking drought reducing profits. That contrasts with Morgan Stanley, where comparable businesses accounted for 45 percent of its revenue during the same time frame.
Moody’s (NYSE:) director of economic research Dante DeAntonio claimed that employment in insurance and finance peaked in the fourth quarter before beginning to decline in December.
He stated that this obscured a weaker trend in credit intermediation or banking, which has decreased modestly over the past six months after remaining flat for the majority of 2021 and early 2022.
DeAntonio stated, “We expect payrolls to remain flat or slightly down throughout this year with the most risk coming from these institutions’ residential and commercial lending divisions.” The tide has already turned in some way.”
