FX168 Financial News (North America) News US banking giants continued to lay off workers in the first quarter, with Citigroup falling the most.
Citi (Citi), the third-largest bank in the US, has reduced the number of employees by 2,000 people after completing a large-scale restructuring aimed at increasing profits and reducing management.
(Source: Reuters)
In the three months ending March 31, Bank of America, Wells Fargo, and PNC Financial laid off more than 2,000 employees compared to the previous quarter.
Banks are under pressure to control costs due to uncertain economic prospects. Although investors still expect the Federal Reserve to curb inflation while avoiding a sharp economic slowdown, expectations about the possibility of cutting interest rates later this year are still changing.
Citibank Chief Financial Officer Mark Mason told reporters on Friday that the layoffs are part of a 7,000-person layoff plan. The layoffs will be announced in the upcoming quarterly earnings report, and employees will complete the notice period at that time.
This layoff is part of Citi's larger goal of laying off 20,000 employees over the next two years.
Industry executives acknowledge the challenges of navigating an ever-changing rate landscape. Analysts said that rising financing costs, narrowing net interest spreads, and uneven transaction performance may cause banks to remain cautious.
“We have managed the number of employees,” Bank of America CEO Brian Moynihan told analysts on Tuesday. “We are aware of expectations from January last year that our total number of employees will decline throughout the year.”
The number of employees at Bank of America decreased by more than 4,700 compared to the first quarter of 2023.
Across Wall Street, investment banks have brought in higher revenues, driven by capital market recovery. Executives have become more optimistic, believing that a surge in stock issuance will boost market sentiment and stimulate mergers and acquisitions.
This will boost the prospects for Goldman Sachs and Morgan Stanley, which have reduced the number of employees by 900 and 396, respectively. Morgan Stanley Chief Financial Officer Sharon Yeshaya told analysts on Tuesday that the investment bank is still “looking for opportunities to recruit.”
In 2023, competitor Goldman Sachs carried out the largest round of layoffs since the 2008 global financial crisis.
However, J.P. Morgan did the opposite. The largest bank in the US continues to expand its workforce, adding nearly 2,000 employees in the first quarter, bringing the total number of employees to 31,1921.