During the first quarter, several major US banks have continued to cut their workforce in an effort to control costs amid an uncertain economic outlook.
Citigroup has seen the largest reduction, with a decline in headcount by 2,000 employees after a reorganisation aimed at increasing profits and streamlining management layers.
Bank of America, Wells Fargo and PNC Financial also saw a decrease in headcount by a combined 2,000 jobs compared to the previous quarter.
Despite investor expectations that the Federal Reserve will control inflation and avoid a major economic slowdown, there is still uncertainty about potential interest-rate cuts later this year.
Citi has recently announced that it will cut 7,000 jobs, as part of their plan to reduce staffing by 20,000 over the next two years.
These cuts will be reported in upcoming quarterly earnings as employees complete their notice periods. Citi’s Chief Financial Officer, Mark Mason, informed reporters about this on Friday.
Many industry executives have acknowledged the challenges of navigating the changing rate environment.
Analysts predict that higher funding costs, contracting net interest margins, and uneven trading results are likely to make banks more cautious.
Bank of America CEO Brian Moynihan said, “We managed headcount. We noted the expectation in January of last year that our headcount will be down throughout the year.”
The second-largest lender has reduced its staff primarily through attrition, meaning that it has not been filling positions when employees leave.
According to Brian Moynihan, the bank’s headcount has decreased by more than 4,700 since the first quarter of 2023.
On Wall Street, investment banks have seen higher revenue, thanks to a revival in capital markets. Executives are optimistic that a surge in equity offerings will boost sentiment and lead to more mergers and acquisitions.
Goldman Sachs and Morgan Stanley are two investment banks that have experienced a decline in headcount by 900 and 396 respectively.
However, Morgan Stanley’s finance chief Sharon Yeshaya stated that the bank is still making “opportunistic hires.”
In 2023, Goldman Sachs underwent its biggest round of layoffs since the global financial crisis of 2008. In contrast, JPMorgan Chase added almost 2,000 employees in the first quarter, increasing their total headcount to 311,921.