According to statistics, the global banking industry will lay off more than 60,000 employees this year, the largest scale of layoffs since the financial crisis.
* In addition to the high interest rate environment increasing operating costs, a significant reduction in M&A and financing activity in the banking sector, and a continued decline in profits due to the continued slump in IPOs, the analysis points out, a key reason for the layoffs of major banks may be,Financial practitioners have changed jobs less frequently this year, resulting in more employees than companies expected.
According to the data, the world's 20 largest banks will lay off at least 61,905 employees in 2023, with half of them in the United States, as they face cost pressures from the Federal Reserve's aggressive interest rate hikes.
In 2023, the collapse of Silicon Valley Bank became a landmark event in the global banking industry, and the global banking industry practitioners were implicated in this turmoil, and the merger of Credit Suisse and UBS alone laid off at least 130,000 people, and further significant layoffs are expected in the coming year.
Lee Thacker, an analyst at Silvermine Partners, a financial services executive search firm, stressed that the banking sector lacks stability and growth momentum in the future, and further layoffs are expected to become a major trend.
According to the data, among the six major banks of JPMorgan Chase, Citigroup, Bank of America, Morgan Stanley, Wells Fargo and Goldman Sachs, only JPMorgan Chase has increased its headcount by 5 percent this year1%, Citi remained unchanged, and the other four major banks decreased respectively7% and 54%。
U.S. financial services provider Janney Montgomery Scott said analysts said major banks are cutting costs as much as possible because of greater market uncertainty next yearIn addition, layoffs in the financial sector could also lead to more pressure on the U.S. labor market in 2024, as banks are more prepared to continue cutting spending next year in the face of increased defaults on consumer loans and corporate loans.
Analysts believe that banks must find ways to stop further declines in profits, while at the same time preparing enough funds for bad debts caused by loan defaultsIn January of next year, we will hear a lot of companies discussing this issue.
Statistics show that UBS ranks first among major banks in terms of the number of layoffs, and in November UBS released a report saying that the number of layoffs in 2023 will be 130,000 people, with a total number of employees of 1160,000 people. Wells Fargo is not far behind in the number of layoffs, with 1 in 202320,000 people, with a total of 230,000 employees worldwide, Wells Fargo spent 1$8.6 billion.
Wells Fargo is still cutting costs, and in October Wells Fargo CFO Mike Santomassimo said the layoffs weren't overOnly a small percentage of businesses will not be affected by layoffs in the future:
"We have more room to lay off employees, and the rate of voluntary turnover is low at the momentThis means that the company may need to pay more redundancy compensation in 2024In addition, Wall Street investment banks, including Citigroup, Morgan Stanley, Bank of America, Goldman Sachs and JPMorgan Chase, have laid off 30,000 employees.
Morgan Stanley has cut 2% of its workforce this year due to a slowdown in its investment banking business. Morgan Stanley CEO James Gorman has previously said that the current rate of voluntary employee turnover is low," he saidThis is something we need to solve.
Since 2023, Goldman Sachs' investment banking business has slowed down significantly, and the consumer banking business has also suffered losses, negatively affected by the write-downs of consumer business and real estate investment, since January this year, Goldman Sachs has laid off about 3,200 employees, accounting for 6 of the total number of employees5%；In May, about 250 people were laid off;In June, Goldman Sachs' directors and executives were told at a meeting that "more painful measures" would be ushered in to cut costs.
In terms of the proportion of layoffs, Metro Bank in the UK has the largest number of layoffs, accounting for 20% of the total number of layoffs. Currently, Metro Bank is aiming to save £50 million a year in personnel costs, with a further 800 staff cuts in the future.
Of course, there are also investment banks that did not lay off employees in 2023, such as HSBC and Commerzbank,* the analysis believes that these two banks did not lay off employees in 2023 because they had already carried out large-scale layoffs before that.
There is a view that the development of the banking industry in 2024 will be a continuation of the story in 2023, and major investment banks will become "more conservative" in the future.
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