Big U.S. banks continue to add jobs as Goldman Sachs cuts staff
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[January 14, 2023] By
Saeed Azhar and Niket Nishant
NEW YORK (Reuters) - JPMorgan Chase & Co and Bank of America Corp
continued to add staff as the economy softens, even after the ranks of
the five biggest U.S. lenders swelled by 100,000 since the start of
2020.
The chief financial officers of the two biggest U.S. banks said they
would hire selectively despite waning economic growth.
JPMorgan's Chief Financial Officer Jeremy Barnum said the bank is still
hiring and "in growth mode" in a call with journalists to discuss the
bank's fourth-quarter earnings.
The bank's headcount will probably rise modestly, although "there will
be different adjustments at different times, and we're seeing that all
across the company," Barnum said.
Bank of America also continues to hire, particularly in wealth
management, while also remaining disciplined on its expenses, Chief
Financial Officer Alastair Borthwick told reporters on Friday. Its
workforce swelled to 216,823 at the end of 2022 compared with 208,248 a
year earlier.
"We don't have any plans for mass layoffs," he said.
Citigroup Inc's Chief Financial Officer Mark Mason told an earnings
briefing "we're actively hiring to execute against our strategy. But
we're also repacing where that makes sense in light of the environment
that we're in."
The banking giants stood by their hiring plans even as other lenders cut
staffing in investment banking and mortgages.
The projections came after Goldman Sachs Inc became the first major bank
to commence large layoffs this year, letting go of more than 3,000
employees in its biggest round of job cuts since the 2008 financial
crisis.
BNY Mellon plans to cut around 3% of its workforce this year, a source
familiar with the matter told Reuters on Friday.
Among the five of the top six banks, JPMorgan, Bank of America,
Citigroup Inc, Goldman Sachs and Morgan Stanley added over 100,000 jobs
from the first quarter of 2020, based on their fourth and third quarter
figures.
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A Bank of America logo is pictured in
the Manhattan borough of New York City, New York, U.S., January 30,
2019. REUTERS/Carlo Allegri
Wells Fargo bucked the trend, reducing its headcount by nearly
21,000 in the same period.
Goldman had hired 10,600 people since the start of the pandemic,
including staff for Marcus, its consumer banking unit that was
scaled back in October after losing money.
"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," Natalie Machicao, vice president at executive search
firm Sheffield Haworth in New York.
"Other banks are making cuts, with equity capital markets and
leveraged finance more deeply affected than coverage or M&A," she
said, noting that the trims were happening on an individual basis or
smaller scale rather than a large reduction in force.
Goldman's cost cuts reflect its reliance on investment banking and
trading, which accounted for about 65% of its revenue in the third
quarter of 2022, as the dealmaking drought eroded profits. That
compares with Morgan Stanley, where the comparable businesses made
up 45% of its revenue in the same period.
Dante DeAntonio, a director of economic research at Moody's, said
employment in finance and insurance plateaued in the fourth quarter
and started to decline in December.
That masked a weaker trend in the credit intermediation or banking,
which has declined modestly over the last 6 months after staying
flat for most of 2021 and early 2022, he said.
"We expect payrolls to remain flat to slightly down throughout this
year with the most risk coming from the residential and commercial
lending divisions within these institutions," DeAntonio said. "In
some sense, the tide has already turned."
(Reporting by Saeed Azhar, Lananh Nguyen, Niket Nishant and Carolina
Mandl; Editing by Lananh Nguyen, Nick Zieminski and Aurora Ellis)
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