Wisdom Finance has observed that in the first quarter of this year, major U.S. banks have continued to reduce their workforce, with Citigroup (C.US) leading in the number of job cuts. Citigroup, the third-largest bank in the U.S., has downsized its workforce by 2,000 following a substantial reorganization aimed at enhancing profitability and streamlining management.
For the three months ending March 31, Bank of America Corp (BAC.US), Wells Fargo & Co (WFC.US), and PNC Financial (PNC.US) collectively witnessed a reduction of approximately 2,000 employees from the previous quarter.
Banks are facing pressure to manage costs amidst an uncertain economic outlook. Investors anticipate that the Federal Reserve will take action to curb inflation while preventing a significant economic downturn. However, the prospects of an interest rate cut later in the year remain unclear.
Citigroup's layoffs are part of a broader plan to eliminate 7,000 positions, as revealed by Citi's Chief Financial Officer, Mark Mason, who spoke to reporters on Friday. This forms part of Citi's larger objective of reducing its workforce by 20,000 jobs over the next two years.
Industry executives are aware of the difficulties in navigating the fluctuating rate environment. Analysts suggest that escalating financing costs, diminishing net interest margins, and inconsistent trading performance may keep banks cautious.
Bank of America's Chief Executive, Brian Moynihan, informed analysts on Tuesday, "We've managed our headcount," and acknowledged the expectation set in January that the bank's workforce would decrease for the entire year. The world's second-largest bank has significantly reduced its workforce through attrition, a strategy that involves not filling vacancies when employees depart.
Since the first quarter of 2023, the bank's workforce has shrunk by over 4,700, according to Moynihan.
Across Wall Street, investment banks are experiencing increased revenues, driven by a resurgence in the capital markets. Executives are increasingly hopeful that a surge in equity offerings will invigorate market activity and stimulate merger and acquisition transactions.
This optimistic outlook is expected to benefit Goldman Sachs and Morgan Stanley, which have respectively downsized their workforces by 900 and 396. Morgan Stanley's Chief Financial Officer, Sharon Yeshaya, informed analysts on Tuesday that the investment bank remains "awaiting the opportunity to hire."
In 2023, Goldman Sachs executed its most extensive round of layoffs since the 2008 global financial crisis.
However, JPMorgan Chase (JPM.US), the largest U.S. bank, has pursued a different strategy by continuing to expand its workforce. The bank added nearly 2,000 employees in the first quarter, bringing its total workforce to 311,921.
