Big Banks Cut More Than 60,000 Employees This Year: Report

Big banks said goodbye to more than 60,000 employees as sagging profits and uncertain economic conditions forced many to make tough calls.

The Financial Times calculated that 20 of the largest banks in the world cut at least 61,905 jobs this year, making it one of the worst years for headcount reductions in the sector since the 2008 financial crisis saw more than 140,000 jobs on the chopping block.

Amid its acquisition of rival Credit Suisse, UBS nixed 13,000 jobs this year — the most of any of the other major banks, according to the FT. More cuts are expected into next year as the bank plans to reduce total headcount by about 30% of combined staff, or 35,000 people, Fortune reported earlier this year. The bank posted a $781 million loss in its latest quarter due to the burgeoning costs of its acquisition, which was approved by the UBS board of directors earlier this month and will be completed next year, pending regulatory approval.

At least 30,000 of this year’s banking sector cuts came from big Wall Street banks, the FT found. After a pandemic-era hiring boom, many are having to scale back their operations in the investment banking sectors, while others are booking losses from mergers, reorganizations and returns to yearly cuts of their lowest performers.

The second-largest cuts this year came from Wells Fargo, which laid off about 12,000 of its global employees, bringing its headcount down to 230,000, according to the FT. The bank’s chief executive Charlie Scharf warned early this month that Wells could face as much as $1 billion in severance costs in its fourth quarter as it looks to become more efficient. 

With its massive corporate overhaul underway, Citigroup cut some 5,000 jobs this year, including more than 300 senior manager roles. The bank is expected to reduce its 240,000 global headcount by about 10% under CEO Jane Fraser’s plan to split the bank into five interconnected business units.

Other Wall Street reductions include 4,800 cuts at Morgan Stanley, 4,000 at Bank of America, 3,200 at Goldman Sachs and 1,000 at JPMorgan Chase.

“The revenues aren’t there, so this is partly a response to overexpansion. But there is also a simpler explanation: political cost-cutting,” Lee Thacker, owner of Silvermine Partners, told the FT. “If you run a division and your boss asks for savings, you cut or you get fired.”

As high costs weigh on profit margins, banks have become less concerned about retaining talent this year. Wall Street bonuses are expected to shrink by as much as 25% this year or remain flat, according to a report by Johnson Associates.