Rising stock prices, rebounding profits, restored dividends and a growing economy are signaling to U.S. banks it’s time for more job cuts.
Even after the industry posted its best results since 2006, the six largest U.S. banks announced plans in the first three months of this year to eliminate about 21,000 positions, or 1.8% of their combined workforce, according to data compiled by Bloomberg.
That’s the most since 2011’s third quarter. JPMorgan Chase & Co. (JPM), whose 259,000 people produced three straight years of record profit, topped the list with 17,000 reductions scheduled by the end of 2014.
Banks are under pressure to keep profit climbing amid weak revenue growth, and employees are among the biggest expenses after interest costs. The most vulnerable people work in units where demand is waning such as mortgage foreclosures. Their departures would come on top of 320,000 jobs culled from U.S. financial companies in the past five years, the data show.
'They have a better feel for what their business model looks like and they are starting to align headcount', said Robert Dicks, a principal at Deloitte & Touche LLP in New York who advises financial firms on staffing. 'We were out of whack for a couple of years, but we’re balanced right now'.
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