Global banks cut jobs as cost pressures mount

Volatile markets are making bank bosses nervous about profitability through the year

Reuters
Published : 11 Jan 2023, 06:07 PM
Updated : 11 Jan 2023, 06:07 PM

Banks have begun to trim jobs globally, hit by cost pressures as a result of inflation and shrinking revenues in many core business lines amid volatile markets that are making bank bosses nervous about profitability through the year. 

The following major banks have announced or been reported to be making job cuts: 

BARCLAYS 

Barclays cut its workforce in corporate and investment banking by under 3 percent, a source told Reuters on Nov 8, weeks after reporting a 45 percent slump in merger advisory fees. 

The British investment bank has performed well in recent quarters, especially in fixed income trading, but a blunder in the United States that saw it sell more securities than permitted has cost it hundreds of millions of dollars in penalties. 

CITIGROUP 

Citi eliminated dozens of jobs across its investment banking division, as a dealmaking slump continues to weigh on Wall Street's biggest banks, Bloomberg News reported on Nov. 8. 

The US lender has, like its peers, boosted its lending income as interest rates rise, but the aggressive action by the Federal Reserve and other central banks has sparked fears of a downturn that could hit banks' loan books in time. 

CREDIT SUISSE 

Credit Suisse CSGN.S is accelerating cost cuts, Chairman Axel Lehmann said on Dec 2, confirming a Reuters report, as the bank races to slash its cost base by around 2.5 billion Swiss francs ($2.68 billion). 

Credit Suisse had already said it would lay off some staff. The cost savings reported are likely to involve more job cuts than previously announced for the first wave of reductions, including in its wealth business, Reuters reported. 

The bank is cutting about 5 percent of its private banking headcount in Hong Kong, two sources said. 

DEUTSCHE BANK 

Deutsche Bank, Germany's largest bank, cut staff in its investment bank's origination and advisory teams in October, in a move than affected mostly junior bankers. 

The cuts included dozens of staff in New York and London, Reuters reported. 

GOLDMAN SACHS 

Goldman Sachs laying off staff on Jan 11 in a sweeping cost-cutting drive, with around a third of those affected coming from the investment banking and global markets division, a source familiar with the matter told Reuters. 

Just over 3,000 employees will be let go, the source, who could not be named, said on Jan. 9. A separate source confirmed on Jan 11 that cuts had started. 

The long-expected jobs cull at the Wall Street titan is expected to represent the biggest contraction in headcount since the financial crisis. 

HSBC 

Under pressure from his biggest shareholder, China's Ping An Insurance Group, to improve profit, HSBC Chief Executive Noel Quinn has in recent months accelerated plans to shrink its global empire and streamline its management. 

Reuters reported HSBC is shedding at least 200 senior managers as it prunes the ranks of chief operating officers it has across an array of country and business lines. 

The bank also announced it is selling its Canadian business for $10 billion, removing around 4,000 employees from its wage bill in a stroke. It also announced on Nov 30 the sale of its much smaller New Zealand business, and the closure of a further 114 branches in Britain, leaving it with around a third of the outlets it had as recently as 2016. 

MORGAN STANLEY 

Morgan Stanley is making modest job cuts worldwide, Chief Executive James Gorman said at the Reuters NEXT conference on Dec 1, without giving numbers. 

Reuters had on Nov 3 reported layoffs were coming at Morgan Stanley, with dealmakers in its Hong Kong and mainland China businesses among those affected, as strict Chinese lockdown rules weighed on activity. Sources said the cuts would go beyond usual attrition.

Toufique Imrose Khalidi
Editor-in-Chief and Publisher