International Tsunami of Layoffs Secretly Threatens Big Banks News – 30 minutes ago

Jakarta, CNBC Indonesia – Large banks are secretly reported to have laid off employees. Some of the biggest layoffs are believed to still be happening.

This is happening at least in the United States (US), according to the latest report CNBC International. It has been recorded that 20,000 layoffs have been carried out throughout 2023.

“Banks are cutting costs as much as possible because of the uncertain circumstances next year,” said Janney Montgomery Scott Research Director, Chris Marinac, Friday (20/10/2023).

The move comes after a two-year hiring boom during the Covid pandemic, fueled by a surge in activity on Wall Street. However, this eased after the central bank, the Federal Reserve (Fed), started raising interest rates last year to cool the economy.

US banks are reportedly suddenly overstaffed as fewer consumers seek mortgages. Companies are also issuing less debt or buying up competitors.

“Job losses in the financial industry could put pressure on the US labor market in 2024. Faced with rising defaults on corporate and consumer loans, lenders are poised to make even bigger cuts next year,” Marinac said again.

“They need to find ways to keep income from falling further and provide money for provision purposes because more and more loans are going bad,” he explained.

“As we get into January, you’re going to hear a lot of companies talking about this.”

From a number of data, layoffs in the US are actually visible. These include Wells Fargo and Goldman Sachs.

Each is said to have hired 5% of its workforce by 2023. At Wells Fargo, the layoffs came after the bank announced a strategic shift away from the mortgage business in January.

“There are very few parts of the company that will escape cuts,” Wells Fargo CFO Mike Santomassimo said.

“We still have additional opportunities to reduce headcount … which will likely result in additional severance costs for action in 2024,” he added.

Meanwhile Goldman said it had “right-sized” the bank. Until now, according to the same page, the number of employees at this New York-based bank is still decreasing.

“In the coming weeks, the bank will lay off around 1% or 2% of its employees,” according to sources CNBC International.

It is known that the number of employees will also decrease as Goldman shifts away from consumer financing. The company has agreed to sell two businesses in a deal to be finalized in the coming months, its wealth management unit and fintech lender GreenSky.

On the other hand, layoffs were also carried out by Morgan Stanley. CEOC James Gorman said so on Wednesday.

“Attrition is very low, and this is something we have to address,” he said.

The bank has cut about 2% of its workforce this year amid a prolonged slowdown in investment banking activity. These aggregate figures obscure the hiring that banks are still doing.

Bank of America employees are also reported to be down 1.9% this year. The company, which has employed 12,000 people so far, has signaled layoffs.

[Gambas:Video CNBC]

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