Banks on pace to cut more than 80K jobs this year, highest since 2015

Dive Brief:

The resumption of job cuts at big banks such as Citi, Wells Fargo, HSBC and Deutsche Bank — after a months-long pause amid the pandemic — have pushed gross losses announced this year to 63,785 jobs, according to a Bloomberg analysis.
That figure puts the industry on pace to exceed the nearly 78,000 jobs it shed last year, for the highest total since 2015, when banks cut 91,400 positions.
The actual number is likely higher because many banks reduce headcount without announcing they are doing so, Bloomberg reported last week.

Dive Insight:

News of the reductions comes despite company filings indicating the 15 largest U.S. and European banks added 19,000 jobs during the first half of 2020. Barclays, for example, added 7,000 employees. Citi in January announced its intention to hire 2,500 coders. And Bank of America said it hired 2,000 people in March and was shifting more than 3,000 employees to new roles in its consumer and small-business divisions.

Wells Fargo added 6,500 employees between January and June, but sources told Bloomberg in July it expected to cut tens of thousands of positions beginning this year.

Some banks cited a need to cut costs to offset expected losses from loans. Wells CEO Charlie Scharf said he aims to slash $10 billion in annual expenses.

Other banks have noted the need to comply with new regulations and invest in digital technology, Bloomberg reported. Citi likely falls in that camp. It announced last week it would cut less than 1% of its workforce — a figure that nonetheless amounts to 2,000 people — shortly after The Wall Street Journal broke the news that the nation’s third-largest bank faces a reprimand from the Office of the Comptroller of the Currency and the Federal Reserve. The bank will need to invest significant funds to finish updating its patchwork of unit-specific risk management processes that are rooted in the 1990s into a single system that complies with industry standards.

Banks have disclosed about 500,000 job cuts since the start of 2014, Bloomberg reported. Most of this year’s reductions come from Europe-based banks. HSBC is in the midst of an initiative to cull 35,000 positions by 2022 and slash annual costs by $4.5 billion. Deutsche is cutting about 18,000 by the same end date.