Large banks are cutting thousands of jobs and there are further layoffs

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

Michael Nagle | Bloomberg | Getty Images

America’s largest 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 staff or announced plans to do so, with one crucial exception JPMorgan Chasethe largest and most profitable US bank.

Pressured by the impact of higher interest rates on mortgage business, Wall Street dealmaking and financing costs, the next five largest U.S. banks have collectively cut 20,000 jobs so far this year, company filings show.

The moves come after a two-year hiring boom during the Covid pandemic, fueled by a surge in activity on Wall Street. That faded after the Federal Reserve began raising interest rates last year to cool an overheating economy, and banks suddenly found themselves overstaffed in an environment where fewer consumers were looking for mortgages and fewer companies were issuing debt or buying rivals.

“Banks are cutting costs where they can because things are very uncertain next year,” Chris Marinacsaid research director at Janney Montgomery Scott in a telephone interview.

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

“They need to find leverage to prevent earnings from falling further and to free up money for provisions if more loans default,” he said. “By January you’ll hear a lot of companies talking about this.”

Deepest cuts

Goldman layoffs

Citigroup cuts

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