Global Banks Slash Jobs As Cost Pressures Pile

Global banks are in the process of slashing at least 5,000 jobs as earnings at lucrative investment banking units come under pressure from fast-rising interest rates and volatility in capital markets, according to a Reuters tally of reported cuts.

Rapidly slowing economic conditions have also caused lenders to set aside rainy-day funds to prepare for potential defaults.

The following major banks have announced or been reported to be making headcount reductions:

BARCLAYS

Barclays (BARC.L) reduced its workforce in corporate and investment banking by under 3%, a source told Reuters on Nov. 8, weeks after posting a 45% drop in merger advisory fees.

The British investment bank has fared well in recent quarters, particularly in fixed-income trading, but a blunder in the United States that saw it sell more securities than allowed by regulators has cost it hundreds of millions of dollars in fines.

CITIGROUP

Citi (C.N) cut dozens of jobs across its investment banking division, as a dealmaking plunge continues to weigh on Wall Street’s largest banks, Bloomberg News reported on Nov. 8.

The U.S. lender has, like its peers, increased its lending income as interest rates hike, but the aggressive action by the Federal Reserve and other central banks has raised fears of a slowdown that could hurt banks’ loan books in time.

CREDIT SUISSE

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

Credit Suisse had already said it would fire some employees. The cost savings reported will probably involve more job cuts than previously announced for the first wave of reductions, including in its wealth business, Reuters reported.

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

DEUTSCHE BANK

Deutsche Bank (DBKGn.DE), Germany’s biggest bank, laid off staff in its investment bank’s origination and advisory teams in October, in a move that affected mainly junior bankers.

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

GOLDMAN SACHS

Goldman Sachs (GS.N) started cutting staff on Jan. 11 in an extensive cost-cutting drive, with around a third of those affected coming from the global market and investment banking division, a source with knowledge of the matter told Reuters.

Just over 3,000 staff will be fired, the source, who could not be named, said on Jan. 9. A different source confirmed on Jan. 11 that layoffs had started.

The long-expected jobs cuts at the Wall Street giant are expected to represent the largest contraction in headcount since the financial crisis.

HSBC

Under pressure from its largest shareholder, China’s Ping An Insurance Group, to boost profit, HSBC Chief Executive Noel Quinn has in recent months advanced plans to reduce its global empire and streamline its management.

Reuters reported HSBC is firing at least 200 senior managers as it prunes the ranks of chief operating officers it has across a number of countries and business lines.

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

MORGAN STANLEY (MS.N)

Last month, the investment bank slashed about 2% of its headcount, a source conversant with the company’s plans told Reuters. The cuts supposedly affected about 1,600 people.

Morgan Stanley is making modest reductions globally, Chief Executive James Gorman said at the Reuters NEXT conference on Dec. 1, without giving figures.

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

WELLS FARGO & CO (WFC.N)

The lender lay off hundreds of people in its mortgage business across the United States, Bloomberg News reported in December, citing people with knowledge of the bank’s plans.

“We regularly review and adjust staffing levels to align with market conditions and the needs of our businesses,” the bank had said in an emailed statement to Reuters at the time, without providing any details on the number of employees or units affected.

($1 = 0.9321 Swiss franc)