“Workforce Turbulence: U.S. Top Banks Cut Over 17,000 Jobs in 2023; Additional Layoffs on the Horizon?”

Major U.S. Banks Trim Workforces by 17,700 in 2023: Further Layoffs Expected?

Wells Fargo, Bank of America, and Citigroup collectively reduced their workforces by a total of 17,700 employees in the previous year, as reported in their fourth-quarter earnings. The decline in dealmaking and softened borrower demand prompted these banking giants to either lay off employees or refrain from replacing those who departed.

In contrast to the trend, JPMorgan Chase, the largest lender in the nation, continued to expand its workforce for the third consecutive year. The banking industry faces ongoing challenges in 2024, with potential headwinds in commercial real estate and proposed capital rules that may lead banks to curtail lending.

The economic uncertainty of the previous year weighed on dealmaking, impacting Wall Street businesses. While the S&P 500 banks index recorded a 7% increase in 2023, it lagged behind indexes tracking industrial or consumer discretionary companies.

Citigroup experienced a workforce reduction of 1,000 employees, bringing its total to 239,000 in 2023. The bank outlined plans to cut an additional 20,000 jobs over the next two years as part of a broader reorganization and business changes. Bank of America and Wells Fargo saw their workforces contract by approximately 2% and 5%, respectively, during the same period.

In contrast, JPMorgan increased its employee count by more than 16,200, marking the third consecutive year of expansion. The bank acquired failed lender First Republic Bank in a rescue deal in May 2023, contributing to its consistent growth.

Goldman Sachs and Morgan Stanley are expected to disclose their latest headcount figures in the coming week. As of September’s end, both banks had collectively cut over 4,300 jobs compared to the previous year. Goldman Sachs conducted its largest round of layoffs since the 2008 global financial crisis earlier in 2023 but expressed readiness for selective investments in headcount by October.