Banks Cut 60,000 Jobs In One Of The Toughest Years Since The Financial Crisis
Global banks saw a significant reduction in their workforce in 2023, shedding over 60,000 jobs. This downsizing, one of the most extensive since the financial crisis, emerged as investment banks faced declining fees due to a slowdown in dealmaking and public listings. The aim was to safeguard profit margins by scaling down personnel.
The merger of Credit Suisse by UBS alone resulted in a reduction of at least 13,000 roles at the combined entity, with further substantial job cuts anticipated in the upcoming year. Lee Thacker from Silvermine Partners highlighted the lack of stability and growth in banks, predicting further job cuts as a prevailing trend.
Among the world's top banks, at least 61,905 jobs were cut in 2023, majorly impacting Wall Street lenders. Unlike previous years, where European banks grappled with low interest rates, this time, about half of the reductions came from US-based institutions dealing with rapid interest rate changes.
UBS marked the most significant job cuts as it assimilated Credit Suisse, slashing 13,000 positions, with more expected in 2024. Wells Fargo, the second-largest cutter, lowered its global headcount by 12,000, signaling potential further reductions.
Other major Wall Street players such as Citigroup, Morgan Stanley, Bank of America, Goldman Sachs and JPMorgan Chase collectively shed around 30,000 jobs. These actions reflect a response to shrinking revenues, leading banks to streamline operations and rationalise costs.
Despite these layoffs, some banks anticipate a revival in dealmaking, holding off deeper staff cuts. Gaurav Arora from Coalition suggested that while layoffs were noticeable, they didn't mirror the significant drops in revenues. However, banks remain cautious about the surplus funds in the Americas, which might impact decision-making in the near term.
While most global banks reduced less than 5 per cent of their staff, Metro Bank in the UK stands out, announcing plans to cut a substantial 20 per cent of its workforce.
