By Tyler Durden
We covered when Wells Fargo laid off 700 employees in early October, noting the bank, best known in recent years for scamming retail customers and botching small business refi loans, was just likely just starting to implement a larger plan that would result in the loss of tens of thousands of jobs.
We knew then that other banks would eventually follow suit and now, it looks like this is starting to take place. JPMorgan has started hundreds of dismissals, including 80 at its consumer unit. Goldman has also started eliminating about 400 positions, including “back office roles”.
While much of the financial sector was spared from massive layoffs due to the pandemic, hiring has finally slowed and other banks are starting to look at implementing cuts, according to Bloomberg.
Alan Johnson, the head of compensation-consulting firm Johnson Associates Inc., predicts that the financial industry will see its headcount fall by 10% by mid-2021.
“Financial services and banking has too many people. Next year is going to be very low hiring. There’ll be some layoffs,” he said.
“Firms are not hiring at the levels they were. The trajectory of economic recovery is so unknown and it’s so uncertain and it’s so significant, and you overlay the pandemic and remote working and Zoom — if you’re a laid-off employee, this is a very difficult set of circumstances,” he added.
And so the financial service workers who spent the pandemic earning fees “arranging emergency loans” and handling an influx of volume on trading desks could all eventually see their heads on the layoff chopping block.
Firings will likely focus on traditional banking, Bloomberg says, as banking services move to online formats. Wall Street could see some layoffs, however, especially given recent mergers (like that of Schwab and TD Ameritrade) in the brokerage space.
Even worse is that financial executives who are being laid off from large banks may find it difficult to find jobs at smaller, rival firms. The length of time to land a job has “roughly doubled” for senior executives since before the pandemic. Openings in banking and finance are down 21% from a year prior, according to data from Indeed.com.
The one silver lining appears to be mortgage operations. With rates at historic lows, mortgage banks are the sole area in the industry that is adding personnel.
Jeramy Kaiman, head of professional recruitment in western U.S. at staffing firm Adecco Group said: “Mortgage is booming — I don’t even know what other word to say. Candidates are all receiving three to five offers in 24 hours when they’re on the market.”
As noted, Wells Fargo is expected to shed “up to tens of thousands” of workers over the next few years, reducing branches as part of its cost-cutting initiative.
Vickee Adams, spokeswoman for Wells Fargo, said: “In those situations, to ensure we continue to serve customers well, we keep employees working in other nearby branches whenever possible. We are as responsive to our employees as possible, providing jobs-search resources and other assistance as best we can.”
Source: Zero Hedge
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