US banking giants shed over 17,000 employees in turbulent year

Wells Fargo, Bank of America and Citigroup reduced their workforces by a combined 17,700 last year, the banking giants reported in their fourth-quarter earnings on Friday.

As dealmaking dried up and demand from borrowers softened last year, banks laid off employees or stopped replacing those who left. 

JPMorgan Chase, the nation's largest lender, bucked the trend by bolstering its ranks for a third straight year.

Challenging times for the industry could persist this year as weakness in commercial real estate and tougher proposed capital rules could prompt banks to pull back on lending.

Wall Street businesses suffered last year as economic uncertainty weighed on dealmaking.

While the S&P 500 banks index (.SPXBK) rose 7 per cent in 2023, it underperformed indexes tracking industrial or consumer discretionary companies.

CITI OVERHAULS, GOLDMAN STEADIES SHIP

Citigroup's headcount fell by 1,000 to 239,000 employees in 2023, and the lender outlined plans to cut 20,000 jobs over the next two years including layoffs from a sweeping reorganization and other business changes.

At Bank of America and Wells Fargo the workforce contracted by about 2 per cent and 5 per cent, respectively, last year.

JPMorgan added more than 16,200 employees. The bank bought failed lender First Republic Bank in a rescue deal in May. It has added jobs every year since 2021.

Goldman Sachs and Morgan Stanley are set to disclose their latest headcount next week. As of September end, they had cut over 4,300 jobs versus last year.

Earlier in 2023, Goldman Sachs undertook its biggest round of layoffs since the global financial crisis of 2008. In October, the bank's CFO Denis Coleman said they were in a position to do "selective investments" in headcount.