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20,000 jobs cut at major banks, more layoffs expected

A pile of money. (Government Accountability Office)
October 20, 2023

Despite five of the largest banks in the United States cutting roughly 20,000 combined jobs in 2023, additional layoffs are expected, according to a new report.

According to a CNBC News report based on bank company filings, CitiGroup, Bank of America, Morgan Stanley, Wells Fargo, and Goldman Sachs have all implemented layoffs this year, with multiple banks still expecting to cut more positions. The major increase in bank layoffs has come amidst higher interest rates on bank mortgages, which has resulted in a reversal of the two-year bank hiring surge that occurred during the COVID-19 pandemic.

“Banks are cutting costs where they can because things are really uncertain next year,” Chris Marinac, Janney Montgomery Scott’s research director, told CNBC News.

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

“They need to find levers to keep earnings from falling further and to free up money for provisions as more loans go bad,” Marinac added. “By the time we roll into January, you’ll hear a lot of companies talking about this.”

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According to CNBC News, the highest number of layoffs have been at Goldman Sachs and Wells Fargo, with both bank companies cutting approximately 5% of their total workforce this year. Additionally, Wells Fargo is expecting to continue reducing its labor force. Wells Fargo CFO Mike Santomassimo recently announced that “very few parts of the company” will be shielded from additional cuts.

“We still have additional opportunities to reduce headcount,” he added. “Attrition has remained low, which will likely result in additional severance expense for actions in 2024.”

CNBC News reported that while Citigroup’s staff numbers have been relatively stable this year, the company’s CFO, Mark Mason, told analysts last week that Citigroup will be making significant changes. Citigroup has reportedly identified 7,000 job cuts.

While other major banks have significantly reduced staffing, JPMorgan has increased the amount of positions at its company. According to CNBC News, the number of employees increased by 5.1% this year by expanding its network, investing in technology, and acquiring First Republic. JPMorgan noted that the company currently has over 10,000 positions still available.