Factbox-Global banks take axe to jobs as cost pressures mount
LONDON (Reuters) – Banks typically trim jobs towards the end of the year, but 2022 has seen a bigger wave of redundancies and layoffs.
Rising cost pressures as a result of inflation and shrinking revenues in many core business lines amid volatile markets are making bank bosses nervous about profitability in 2023.
The following major banks have announced or been reported to be making job cuts:
Barclays cut its workforce in corporate and investment banking by under 3%, a source told Reuters on Nov.8, weeks after reporting a 45% slump in merger advisory fees.
The British investment bank has performed well in recent quarters, in fixed income trading especially, but a blunder in the U.S. that saw it sell more securities than permitted has cost it hundreds of millions of dollars in penalties.
Citi eliminated dozens of jobs across its investment banking division, as a dealmaking slump continues to weigh on Wall Street’s biggest banks, Bloomberg News reported on Nov.8.
The U.S. lender has like its peers boosted its lending income as interest rates rise, but the aggressive action by the Federal Reserve and other central banks has sparked fears of a downturn that could hit banks’ loan books in time.
Credit Suisse is accelerating cost cuts announced just weeks ago, Chairman Axel Lehmann said on Dec. 2, confirming a Reuters report, as the bank races to slash its cost base by around 2.5 billion Swiss francs ($2.68 billion).
Credit Suisse had already said it would lay off some staff. The cost savings reported this month are likely to involve more job cuts than previously announced for the first wave of reductions, including in its wealth business, Reuters reported.
The bank is cutting about 5% of its private banking headcount in Hong Kong, two sources said.
Deutsche Bank, Germany’s largest bank, cut staff in its investment bank’s origination and advisory teams in October, in a move than affected mostly junior bankers.
The cuts included dozens of staff in New York and London, Reuters reported.
Goldman Sachs restarted its annual practice of cutting jobs this year, after pausing in the pandemic.
The Wall Street giant began axing several hundred jobs starting in September.
Goldman typically trims about 1% to 5% of its staff each year, and the 2022 cuts will likely be in the lower end of that range, a source told Reuters.
Under pressure from his biggest shareholder, China’s Ping An Insurance Group, to improve profit HSBC Chief Executive Noel Quinn has in recent months accelerated plans to shrink its global empire and streamline its management.
Reuters reported HSBC is shedding at least 200 senior managers, as it prunes the ranks of Chief Operating Officers it has across an array of country and business lines.
The bank also announced it is selling its Canadian business for $10 billion, removing around 4,000 employees from its wage bill at a stroke. It also announced on Nov. 30 the sale of its much smaller New Zealand business, and the closure of a further 114 branches in Britain, leaving it with around a third of the number of outlets it had as recently as 2016.
Morgan Stanley is making modest job cuts worldwide, Chief Executive James Gorman said at the Reuters NEXT conference on Dec.1, without giving numbers.
Reuters had on Nov. 3 reported layoffs were coming, with dealmakers in its Hong Kong and mainland China businesses among those affected, as strict Chinese lockdown rules weighed on activity. Sources said the cuts would go beyond usual attrition.
($1 = 0.9337 Swiss francs)
(Reporting by Lawrence White; Additional reporting by Iain Withers; Editing by Alexander Smith)
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