In the latest example of just how strong America’s double-adjusted economic ‘recovery’ truly is, JP Morgan is set to layoff some 5,000 employees.
- JPM EXPECTED TO LAY OFF MORE THAN 5,000 BY NEXT YEAR: WSJ
The cuts, which will amount to around 2% of the bank’s total workforce over the course of the next 12 months, come as the bank seeks to pare its reliance on human tellers, favoring machines at its nearly 6,000 branches. However, WSJ notes that the move will also affect workers across the bank’s business lines. Here’s more:
The layoffs on the other hand are more broad-based, affecting all four of the bank’s major business units: corporate and investment banking, consumer and community banking, asset management and commercial banking. Some employees in the “controls” part of the bank, such as those in legal or compliance, will also be affected as the bank trims departments that have grown dramatically over the past few years, people familiar with the matter said.
J.P. Morgan hasn’t detailed the layoffs previously, but did broadly discuss expense cuts in a February presentation to investors. At least 1,000 of the 5,000 layoffs have already been carried out in the past few months, but more are expected as the bank continues to slim expenses in an effort to meet profitability goals, one of the people added.
We suppose cuts to legal and compliance department should come as no surprise, because as we reported last month, the bank is set to implement a new program whereby algos will root out problem employees before regulatory infractions are even committed.
In any event, WSJ goes on to say that the announcement reflects a cautious approach to what is still a very tough environment both from a regulatory perspective and from an NIM perspective:
The latest job cuts show that despite some resiliency in certain business lines, including merger advisory and asset management, J.P. Morgan remains focused on cutting excess costs. J.P. Morgan has trimmed its total head count in 11 of the past 12 quarters, to 241,145 employees, down about 20,000, or 7.7% from the peak.
Banks have been scrambling to cut costs enough to counteract increased regulatory and legal expenses in recent years while revenue growth has been hurt by low interest rates. J.P. Morgan is also looking to more sophisticated technologies to automate work, such as new ATMs or faster trading capabilities. At his Wednesday presentation, Mr. Dimon said the average branch could lose two tellers and add one financial adviser as the business of handling deposits grows more electronic.
“It’s cheaper for us and good for clients,” Mr. Dimon noted.
Maybe so, but we’ll tell you who it’s most certainly not good for: the people who are about to be fired. To those folks we say simply that you can blame ZIRP, a flagging US economy which ZIRP has failed to prop up, and of course, the machines.