(Finance) – Mass layoffs in the banking sectorduring 2023 they were cut over 60 thousand places of work in the field of investment bankswho saw the collapse commissions and reduce profit margins. This is what emerges from a survey conducted by Financial Timesaccording to cu, 61,905 employee positions remained, a figure that compares with the 140 thousand reduced during the global financial crisis of 2007-2008.
About half of the cuts came from large investment banks on Wall Streetwhich they cut approx 30 thousand employees in 2023struggling with a collapse in commissions and with the attempt to keep profit margins unchanged, while in previous years (for example in 2015 and 2019) the cuts were mostly made by European banks, affected by the effects of the banks’ zero interest rate policy central.
The greatest difficulties in the activities of investment bankingwho had to face a collapse of commissions and competition from public securities. An effect of rising interest rate policy practiced by the Federal Reserve, which benefited the interest margin and depressed commissions, due to fewer transactions and prices of public securities. To cope with this decline and to maintain profit margins, investment banks have had to act on the cost front and therefore on reducing staff.
The largest cuts were announced by Wells Fargowhich announced ben’s cuts this month 12,000 seats of work, bringing it to 230 thousand, with 7 thousand cuts already made in the third quarter for a cost of 186 million. The bank has set aside up to $1 billion for further redundancy costs, suggesting there are still thousands of jobs to be eliminated. They follow Citigroupwhich cut 5,000 jobs, Morgan Stanley with 4,800, Bank of America with 4,000, Goldman Sachs with 3,200 e JP Morgan Chase with 1,000 places eliminated.
However, layoffs are not just an American case, There have also been mass layoffs in Europe, due to the banking crises. This is the case for examples of Credit Suisse crisiswhich was saved and taken over by the competitor UBS. A transaction that protected the banking sector, at the expense of the staff: they can be counted 13 thousand fewer jobs in 2023, and more large waves of layoffs are expected next year. UBS number one, Sergio Ermotti, said that 2024 will be “the crucial year” for the acquisition of Credit Suisse, fueling expectations of further reductions in staff in the coming months.
The experts they do not have great optimism for the future and believe that, until there is a recovery in investment banking activity, i staff cuts, more or less accentuated, will be on the agenda. If the British Metro Bank has announced its intention to cut a fifth of its workforce, other European banks like HSBC and Commerzbank abstainedafter announcing huge staff reductions in previous years.