US banks, 11,000 layoffs after the post-pandemic boom – Corriere.it

Wall Street’s big banks are preparing to cut more than 11,000 jobs after the hiring boom in the strong post-pandemic recovery phase, calculates the Financial Times.

Citigroup was the last major US lender to report 5,000 layoffs by the end of the second quarter this week, especially in investment banking and trading. An ad following the thousands of bankers’ cuts disclosed by Goldman Sachs and Morgan Stanley.

Banks have drastically increased the number of employees to cope with the boom in transactions and trading, at a time when working from home has challenged traditional ways of doing business. Lenders are now backing off in the face of an economic slowdown, triggered by rate hikes to curb the run of inflation, which helped bankrupt three US regional banks in March.

This is probably one of the toughest labor markets we have seen since the 2008 financial crisis, acknowledged Max Kemnitzer, managing director for banking and financial services at the Michael Page firm in New York. When you look at metrics like the number of job postings, converting resumes to interviews and interviews to offers, these numbers are the slowest we’ve seen in a long time.

At the end of the first quarter, the big five banks that dominate Wall Street – JPMorgan Chase, Bank of America, Morgan Stanley and Citi – collectively employed a record 882,000 people globally, virtually unchanged from at the end of 2022 and with an increase of more than 100,000 units compared to the end of March 2020, recalls the London newspaper.

This year the trend has reversed, instead of hiring banks they fire. Or at least they don’t replace the employees they leave. For example, as it intends to do Bank of America (BofA), which aims to eliminate 4,000 jobs without laying off. We don’t lay off, we’re trying to do it through outlays, but even these are halved compared to last year, said CEO Brian Moynihan, at the CBS News.

The slowdown in banking activity coincides with the monetary tightening initiated by the Federal Reserve, the US central bank, in March 2022. According to data from Refinitiv, Global Investment Banking Fees Declined Approximately 16% to $43.7 Billion in 2023.

Opportunities for our businesses have shrunk and so we need to make the appropriate adjustmentsGoldman Sachs chief executive David Solomon said this week that Goldman cut about 6 percent of its workforce in January and is now on the verge of axing about 250 managing directors. And according to the FT Goldman is considering resuming its underperforming staff cuts in September, after a hiatus during the pandemic.

But the cuts also concern financial boutiques. In April, Lazar told investors he intended to cut 10% of his staff within this year. Bloomberg he anticipated that Perella Weinberg is cutting 7% of the workforce to free up funds for new talent.

Subscribe to the newsletter of The Economy

Whatever it Takes by Federico Fubini

The challenges for the economy and markets in an unstable world

Europe Matters by Francesca Basso and Viviana Mazza

Europe, the United States and Italy that count, with innovations and important decisions, but also small important stories

One More Thing by Massimo Sideri

From the world of science and technological innovation the news that changes our lives (more than we think)

And don’t forget the newsletters
The Economy Opinions and the Economy 6 pm