Megabanks will cut jobs in 2023 after a year where they had to ‘take over any human they can’

City says 7,000 summer jobs are available for Boston youth ages 14 to 18

By Steve Gilsey

The six largest US banks now have about 0.2% fewer employees than they did at the end of December

The number of full-time employees at the six largest U.S. banks collectively declined partly in the first quarter, reversing a positive trend in a sign of a slowing economy, according to this week’s updates.

Banks disclosed a total of 1,117,602 people on their collective payroll as of March 31, down about 0.2%, or 2,569 people, from 1,120,171 on December 31.

Goldman Sachs Group Inc. (GS) the largest decline of 6.4% as it implemented announced plans to downsize. Wells Fargo & Co. (WFC) was next with a decline of 1.1% and Morgan Stanley (MS) fell slightly, while JPMorgan Chase & Co. added. (JPM) and Bank of America Corp (BAC) part-time positions. Citigroup Inc. remained. (C) stationary.

Looking ahead, banks indicated they remain cautious about hiring but did not hint at any sharp job cuts either.

Bank of America CEO Brian Moynihan told Bloomberg TV Thursday that the bank has no plans to lay off workers. He said, however, that it would “drift” upon draining.

“Imagine last year versus this year — you had to grab whatever human you could hire last year at this time,” Moynihan said. “This year is completely different. Our attrition rate is halved.”

After hiring 38,000 people last year in full in 2024, Bank of America has only hired 5,000 people so far in 2023.

“We’ll probably hire 10,000 or 12,000 people this year, and the number of employees will go down,” Moynihan said. “That’s how fast you had to start the engine and then turn it off. When you have half the attrition… think about how much you have to hire. That’s good news for the company because that’s a lot of inefficiency to get people up to speed.”

Outside of the big banks, the larger regional banks are also taking a closer look at their headcount numbers for 2023.

Many banks are facing narrower profit margins in some lines of their business as interest rates rise. While higher rates allow banks to raise interest rates on loans, lenders also face a higher cost of capital at a time when many consumer borrowers find themselves unable to afford auto or home financing rates.

Huntington Bankers Inc. (HBAN) CFO Zach Wasserman told MarketWatch that the bank plans to keep its headcount flat through 2023. The bank will focus on adding staff in “key growth areas” such as payments, capital markets and geographic expansion. he said, while looking at ways to find efficiencies in other parts of its business.

“The economy will grow at a slower rate for a period of time,” Wasserman said. “You have to keep the expense growth relatively lower. The best companies find efficiencies to reduce expenses while investing in attractive areas.”

Huntington Bancshares ended the first quarter with about 20,200 employees, up 1% from the 20,000 at the end of the fourth quarter.

Also Read: Jobs Added at Morgan Stanley, Bank of America, Citi, and JPMorgan But Cut at Wells Fargo and Goldman

– Steve Gilsey

This content was generated by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently of Dow Jones Newswires and The Wall Street Journal.

 

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04-21-23 1245ET

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