Ally Financial began cutting jobs Monday in an effort that will shrink headcount by less than 5%, a spokesperson for the bank told Bloomberg.
Still, that figure could encompass more than 500 employees, according to a calculation based on Ally’s workforce from January, when headcount stood at 11,700.
“After taking steps over the past year to pause hiring and manage staffing expenses through natural attrition, we have made the difficult choice to selectively reduce our workforce,” Ally spokesperson Peter Gilchrist told Bloomberg in an email. “We remain confident in our long-term strategy, with a strong balance sheet and nimble, scalable businesses that are poised for future growth.”
The cuts will occur across divisions and are not isolated to one line of business, Gilchrist told Bloomberg, adding that Ally employees affected by the cuts can apply for openings elsewhere at the company.
The Detroit-based bank is best known for its auto lending — and has stiffened its underwriting standards there. It wouldn’t be alone in pulling back from the sector: BMO announced last month it will no longer originate indirect auto loans. Citizens Bank in January said it aimed to scale auto-lending portfolio back to between $5 billion and $6 billion by 2024. Then the bank chose in July to stop originating indirect auto loans.
The neobank Upgrade, by contrast, said it planned to grow its network of partner auto dealers from 30 to 100 in September, with a goal of hitting 1,000 sometime next year.
Ally would hardly be the only bank in recent weeks to flag upcoming layoffs. Wells Fargo last week announced it would close a corporate office in Columbia, South Carolina, affecting 525 workers.
Citi, Truist, Barclays and Goldman Sachs also indicated last month that they expected to shrink headcount.
