Global banks cut more than 62,000 jobs in 2023, in one of the heaviest years of layoffs since the global financial crisis in 2008, thus retreating from their new hiring, which increased with the emergence of the Corona pandemic.
Investment banks suffered a second straight year of lower fees as deal closings and public listings declined, prompting Wall Street to cut staff to protect profit margins.
Credit Suisse
In Switzerland, UBS’s acquisition of its counterpart, Credit Suisse, led to a reduction in the number of jobs by at least 13,000 at the latter, with more rounds of layoffs expected next year.
The owner of the financial services company, Silvermine Partners, to attract banking talent, Lee Thacker, said that there is no stability, investment, or growth in most banks, and it is likely that there will be more job cuts.
20 of the largest banks in the world cut at least 61,905 jobs in 2023 (including those laid off by UBS), according to calculations by the Financial Times. This compares to more than 140,000 jobs that the banks themselves eliminated during the global financial crisis. In 2007-2008.
The Financial Times used company disclosures and its own reports to compile the data, and its statistics did not include smaller banks, or small staff cuts, so overall job losses in the sector are higher.
The historic interest rate cuts in European banks in 2015 and 2019 led to widespread layoffs in the banking sector.
to retreat
According to the newspaper, at least half of the layoffs in 2023 came from American banks, which struggled to deal with the speed of interest hikes in the United States and Europe, and in many of these cases, the banks retreated from their appointments after the end of the epidemic when it sparked pent-up demand for concluding deals. Compete for employee services.
However, the largest layoffs by a single institution came at the Swiss bank UBS. Credit Suisse had planned to eliminate 9,000 jobs, and it was expected that the acquired bank would increase the number of layoffs, and more quickly, as it erased jobs. Duplicate, and liquidate many of the investment banks belonging to its former competitor.
Last November, UBS revealed that it had eliminated 13,000 jobs from the combined group, bringing the total number of employees to 116,000 employees, but CEO Sergio Ermotti indicated that 2024 would be the “pivotal year” for the acquisition. Analysts expect that thousands of jobs will be lost during this period.
The second largest bank to lay off employees in 2023 was the American Wells Fargo, as it revealed this month that it had reduced the number of its global employees by 12,000 out of 242,000 employees. He added that he spent $186 million on severance pay costs in the third quarter alone.
The bank’s CEO, Charlie Scharf, announced that the bank has allocated up to $1 billion to cover end-of-service compensation costs, indicating that tens of thousands of additional jobs are at risk.
American banks laid off 5,000 employees: Citigroup laid off 5,000 employees, Morgan Stanley laid off 4,800 employees, Bank of America 4,000 employees, Goldman Sachs 3,200 employees, and JP Morgan 1,000 employees. Collectively, the major Wall Street banks laid off no less than 30,000 employees. In 2023.
Wage costs
In January 2022, Deutsche Bank CEO Christian Sewing said he was “very concerned” that competition for hiring staff was driving up wage costs across Wall Street, where wages had risen by about 15% over the past 12 months.
Data issued by the Greenwich Alliance – a group that provides analyzes and insights for the financial sector – showed that the largest investment banks reduced the number of their employees by 4% in the first half of this year alone, with further reductions in the second half of the year.
However, the layoffs were not as deep as the decline in revenue, which the alliance’s global head of competitor analytics, Gaurav Arora, attributed to banks’ optimism about returning to dealmaking in the new year.
While most global bank layoffs this year affected less than 5% of employees, Metro Bank in Britain announced plans to reduce a fifth of its workforce.
Metro aims to achieve annual savings of 50 million pounds ($63.5 million) annually, up from the previous target of 30 million pounds ($38 million), which will lead to the closure of branches and the departure of up to 800 employees.
Barring the possibility of a swing in investment banking activity, employment prospects in the public sector are unlikely to improve next year, Arora said.
