Banks Slash 60K Jobs as Dealmaking and IPOs Decline

The world’s biggest banks reportedly slashed more than 60,000 jobs in 2023.

It was a year in which investment banks suffered their second year in a row of declining fees amid a downturn in dealmaking and companies going public, the Financial Times (FT) reported Monday (Dec. 25).

In addition, the report said, UBS’ takeover of Credit Suisse has led to at least 13,000 fewer roles at the combined bank, with another round of layoffs expected in 2024.

“There is no stability, no investment, no growth in most banks — and there are likely to be more job cuts,” Lee Thacker, owner of financial services headhunting company Silvermine Partners, told the FT, adding, “There are some very nice gifts being sent to bosses at the moment.”

According to the FT’s calculations, 20 of the world’s largest lenders cut at least 61,905 jobs this year. It was one of the worst years for job cuts at banks since the 2007-2008 financial crisis, when banks eliminated 140,000 positions.

Aside from UBS, the second largest number of job cuts happened at Wells Fargo, which reduced its headcount by 12,000.

The bank will also likely see greater-than-expected expenses from severances tied to those job cuts, with the price tag for those layoffs expected to reach $750 million to just shy of $1 billion for the banking giant’s fourth quarter, CEO Charlie Scharf said earlier this month.

“We are continuing to focus on efficiency with turnover dropping, unfortunately, we’re going to have to be more aggressive about our own internal actions,” Scharf said.

In total, the big Wall Street banks cut at least 30,000 jobs this year: 5,000 at Citi, 4,800 at Morgan Stanley, 4,000 at Bank of America, 3,200 at Goldman Sachs 3,200 and 1,000 at JPMorgan Chase.

“The revenues aren’t there, so this is partly a response to overexpansion. But there is also a simpler explanation: political cost-cutting,” Thacker said. “If you run a division and your boss asks for savings, you cut or you get fired.”

It’s not just banks cutting jobs amid a tougher economic climate. This year saw more than 250,000 tech workers lose their jobs, as both massive companies like Google and tiny startups cut their workforces.