Banks shed 60,000 jobs in one of worst years for cuts since financial crisis

ISLAMABAD: Global banks eliminated more than 60,000 jobs in 2023, marking one of the heaviest years for cuts since the financial crisis and reversing much of their hiring as they emerged from the Covid-19 pandemic.

Investment banks suffered a second consecutive year of plummeting fees as deal making and public listings dried up, leaving Wall Street trying to protect profit margins by reducing headcount.

Elsewhere, the takeover of Credit Suisse by UBS has already resulted in at least 13,000 fewer roles at the combined bank, with further big redundancy rounds expected in the year ahead.

“There is no stability, no investment, no growth in most banks — and there are likely to be more job cuts,” said Lee Thacker, owner of financial services headhunting firm Silvermine Partners, adding: “There are some very nice gifts being sent to bosses at the moment.”

Twenty of the world’s biggest banks cut at least 61,905 jobs in 2023, according to Financial Times calculations. That compares with more than 140,000 jobs slashed by the same lenders during the global financial crisis of 2007-08.

The FT used company disclosures and its own reporting to compile the data and did not include smaller banks or minor staff cuts so the overall total of job losses in the sector will be higher.

In November, UBS disclosed that it had already cut 13,000 jobs from the combined group, leaving it with a total headcount of 116,000. But chief executive Sergio Ermotti has signalled that 2024 will be the “pivotal year” for the takeover and analysts expect thousands more jobs to go in the months ahead.

The second-biggest cutter of 2023 was Wells Fargo, which this month revealed it had lowered its global headcount by 12,000 to 230,000. The bank said it had spent $186m on severance costs in the third quarter alone, with 7,000 jobs jettisoned.

Chief executive Charlie Scharf announced that the bank had set aside as much as $1bn for further severance costs, suggesting tens of thousands of more jobs are at risk.

Citigroup cut 5,000 jobs, Morgan Stanley shed 4,800, Bank of America 4,000, Goldman Sachs 3,200 and JPMorgan Chase 1,000. Collectively, the big Wall Street banks cut at least 30,000 staff in 2023.

Some large banks did not cull staff in 2023, notably HSBC and Commerzbank, which have both undertaken huge workforce reductions in recent years.

Italy’s second-biggest lender UniCredit, which has also been reducing its headcount over the past two years as part of an efficiency drive, did not announce any big redundancy rounds in 2023. Its full-time employees dropped by about 10 per cent — or 7,700 — in the two years to March and it set aside an additional €300mn of restructuring costs to help fund up to 1,000 voluntary departures.