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JPMorgan, BofA cautious on job cuts as Goldman layoffs loom


Oct 6, 2022

By Lananh Nguyen and Saeed Azhar

NEW YORK (Reuters) -JPMorgan Chase and Financial institution of America, the 2 largest U.S. banks by belongings, expressed warning about job cuts in distinction with Goldman Sachs, the place lots of of layoffs may begin as early this month.

“You must very cautious when you may have a little bit of a downturn to start out reducing bankers right here and there as a result of you’ll harm the likelihood for development going ahead,” Daniel Pinto, president and chief working officer of JPMorgan, advised traders at a convention Tuesday. “If something, in some environments like this, there could also be some very, very prime bankers that you can not entry or rent previously that now they’re obtainable to be employed.”

That stance compares with plans by Goldman Sachs Group Inc, in line with a supply conversant in the matter, to chop jobs as early as this month after pausing the annual follow for 2 years throughout the pandemic. Goldman had a headcount of 47,000 on the finish of the second quarter, a 15% leap from the earlier yr.

Wall Road bankers have develop into more and more involved about layoffs within the coming months. As the chance of recession looms and the Federal Reserve raises rates of interest to curb inflation, deal markets have dried up.

JPMorgan’s upbeat view underpins the corporate’s method to its workforce, mentioned Lance Roberts, chief funding strategist and economist at RIA Advisors.

“We are going to see if JPMorgan is true of their extra optimistic views, however historical past means that with the Fed actively climbing charges and lowering their stability sheet, the outlook is extra cloudy with an opportunity of heavy rain,” Roberts mentioned.

Regardless of the investment-banking slowdown, Financial institution of America is at the moment happy with its staffing ranges, the corporate’s chief government officer mentioned on Monday.

“We’re wonderful with our headcount,” Brian Moynihan advised Fox Information in an interview. “I am assured if we have to handle headcount when folks depart us to go to different employers, we simply will not fill all the roles, however we’re in fine condition.”

JPMorgan needed to modify salaries to cope with “method elevated” attrition within the first half of the yr, financial institution President Pinto mentioned. Whereas attrition continues to be excessive, it is normalizing, he mentioned. The financial institution had greater than 278,000 workers on the finish of the second quarter, up 7% from a yr earlier.

Citigroup declined to touch upon job cuts.

Moelis & Co referred Reuters to July feedback from its chief government Ken Moelis, who mentioned the funding financial institution’s expertise pipeline is powerful and it plans to rent aggressively.

The boutique funding financial institution introduced on Tuesday it was including Igor Sokolovsky from Guggenheim Securities as a managing director in New York to advise purchasers on mergers and acquisitions, specializing within the healthcare sector. [L1N30K17Z]

“The phrase goes out proper round Labor Day to take a look at your headcount in a nasty yr,” Moelis mentioned on the time, referring to massive banks. “It is simply the best way the cycle works.”

(Reporting by Lananh Nguyen and Saeed Azhar; extra reporting by Niket Nishant and Mehnaz Yasmin; modifying by Jonathan Oatis and David Gregorio)

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