PNC has begun a 4% headcount reduction, Bloomberg reported Friday, citing the bank’s third-quarter earnings presentation.

That means the Pittsburgh-based lender could cut more than 2,400 employees, based on headcount figures from December, which put the bank’s workforce at 61,545.

PNC expects to take a one-time $150 million charge in the fourth quarter, related to the cuts, which started Oct. 6, according to Bloomberg. 

The bank, however, expects to save $325 million in personnel expenses in 2024, it said Friday.

Bank executives said the move comes in response to muted lending activity and declining interest income.

PNC foreshadowed its layoffs Tuesday, saying it had reviewed its organizational structure with an eye toward expense management, and had “identified an opportunity to better position our company for long-term success,” according to a statement seen by the Pittsburgh Business Times. 

“This includes a shift away from work not fully aligned to our strategic priorities and will result in a reduction in staffing levels in certain areas,” PNC said Tuesday, without detailing the priorities or the job functions targeted for reduction.

PNC CEO Bill Demchak, too, teased “a more structural program that will have a direct impact to ‘24 expenses,” while speaking last month at an industry conference.

“We want to be able to invest into our newer markets and continue to grow them,” Demchak said at the time, according to the Pittsburgh Tribune-Review. “And to do that, we're going to have to save elsewhere and save to the bottom line just given the revenue pressures.”

Reports of layoffs at PNC surfaced earlier this week in several news outlets. Some employees were notified Tuesday during a mandatory Webex conference call that they would be let go, according to social media posts seen by the Pittsburgh Business Times and an anonymous first-person account relayed to American Banker.

The employee told American Banker she was invited to the video meeting Tuesday morning and learned her last day at the bank would be Dec. 1. Employees on the call were muted, and a senior manager ended it without taking questions, the employee told the outlet.

Employees affected this week included corporate workers based in Raleigh, North Carolina; Birmingham, Alabama; and Pittsburgh, according to American Banker. Birmingham’s inclusion may indicate the cuts include some legacy employees brought over in PNC’s acquisition of BBVA’s U.S. footprint. The Spanish bank’s U.S. arm was based in Birmingham. 

This week’s layoff announcement also hit workers in PNC’s commercial lending and anti-money laundering departments, American Banker reported, based on a review of LinkedIn posts by affected employees. Some affected workers were hired as recently as July, according to the outlet.

“While decisions involving personnel are never easy, we believe they will help us more effectively and efficiently deliver for our customers and stakeholders, and we’ll continue to be diligent in our expense management going forward,” Demchak said Friday, according to American Banker.

Cost savings

PNC aimed, at the beginning of 2023, to cut $400 million in expenses by December. 

The bank boosted that figure to $450 million in July, as Demchak told analysts that PNC would find “opportunities for even further expense improvements across the franchise.”

“If you look at our costs, right, we're basically down in every category other than personnel,” Demchak said during the company’s second-quarter earnings call in July, according to the Pittsburgh Post-Gazette. “And we're going to have to take a hard look at where we can generate savings in this company without cutting the potential for growth.”

But PNC also increased its quarterly dividend by 5 cents per share in July, adding to the “pressures” Demchak referenced last month.

For 2024, PNC is now targeting $725 million in expense cuts.

PNC’s 4% headcount trim would mark the bank’s second downsizing of the year, at least. The Pittsburgh-based lender laid off a “limited” number of workers in its home equity and mortgage businesses in July.

PNC would join several other banks that have initiated workforce reductions in recent weeks. Ally Financial began cutting jobs last week in an effort that could affect more than 500 employees. Wells Fargo announced last month 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.