The banking bloodbath boils on.
If the first round of financial services layoffs that took place after the credit collapse of 2008 feel like ancient history, think again. Today Goldman Sachs announced 4,000 layoffs to take place this year while JPMorgan Chase announced a whopping 20,000 layoffs for the coming year.
While the JPM news is stunning, this is a fairly usual tactic for Goldman Sachs. According to media reports, the Dark Heart of Wall Street usually lays off the weakest 5 percent of its employees this time of year. Yahoo Finance reports that "the cuts will likely be deeper in some businesses, particularly equities trading, where volumes and earnings are weak. The number of shares traded on major U.S. exchanges so far this year is down 7.2 percent."
[You’re fired! Hand over your iPhone, please. Employee gadgets make layoffs more complex.]
Yes, you read that right: Most of the cuts will be in Goldman Sachs' equity business while fixed income will be mostly spared. "Fixed-income trading at Goldman, which took big hits last year but has had better volumes this year, will likely see cuts of less than 5 percent," sources tell Yahoo.
(Random thought: Isn’t this bonus season? Yeesh.)
Jamie Dimon's Hangover
Look, we all know it was a very rough year for JPM’s CEO Jamie Dimon. The former Golden Boy during the mortgage meltdown of 2008 - the White House seemed to really like this guy and the Senate LOVED him - had a bad bad 2012. A senior trader known as The London Whale managed to harpoon JPM to the tune of $6.2 billion. Dimon had to take a 50 percent paycut for the debacle of what took place on his watch. There are even calls for Dimon's job to be split into two because the Too Big to Fail guy might be Too Stretched to Succeed.
Let’s look at some numbers that are important to JPMorgan Chase, the largest bank in the USA:
- JPMC employed 259,000 workers as of last December.
- It will cut 13,000 to 15,000 jobs in its mortgage unit.
- It will eliminate 3,000 to 4,000 in its community banking division except for home lending.
- The bank hopes to cut $1 billion in expenses in 2013.
[Jamie Dimon and The London Whale - What Went Wrong?]
Phil Albinus is the former editor-in-chief of Advanced Trading. He has nearly two decades of journalism experience and has been covering financial technology and regulation for nine years. Before joining Advanced Trading, he served as editor of Waters, a monthly trade journal ... View Full Bio