U.S. banking behemoths persisted with employee layoffs in the first quarter, led by Citigroup (NYSE:C), which saw the most significant decline.
Citigroup’s headcount dropped by 2,000 employees following a comprehensive reorganization aimed at enhancing profits and streamlining management layers.
In the same period, Bank of America (NYSE:BAC), Wells Fargo (NYSE:WFC), and PNC Financial (NYSE:PNC) collectively trimmed over 2,000 jobs compared to the previous quarter.
Banks face mounting pressure to rein in costs amidst an uncertain economic landscape. While investors anticipate the Federal Reserve’s efforts to curb inflation without triggering a significant economic slowdown, uncertainties persist regarding potential interest rate adjustments later in the year.
Citi’s staff reductions form part of a broader initiative to slash 20,000 jobs over the next two years, with a total of 7,000 job cuts to be reported in upcoming quarterly earnings as employees complete their notice periods, according to Chief Financial Officer Mark Mason.
Bank executives acknowledge the challenges posed by the evolving rate environment. Analysts anticipate that higher funding costs, shrinking net interest margins, and inconsistent trading results will keep banks cautious.
Bank of America CEO Brian Moynihan noted a decline in headcount throughout the year, with BofA’s headcount dropping by over 4,700 since the first quarter of 2023.
While investment banks across Wall Street recorded increased revenue driven by a resurgence in capital markets, executives are cautiously optimistic about the potential for a surge in equity offerings to boost sentiment and drive mergers and acquisitions, benefiting firms like Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS), where headcount decreased by 900 and 396, respectively. Morgan Stanley’s finance chief Sharon Yeshaya highlighted the bank’s continued focus on “opportunistic hires.”
In contrast, JPMorgan Chase (NYSE:JPM) bucked the trend, adding nearly 2,000 employees in the first quarter, bringing its total headcount to 311,921.
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