In one of the worst years since the financial crisis, banks shed 60,000 positions.

In 2023, global banks will have eliminated over 60,000 jobs. This is one of the most significant years of cuts since the financial crises. They also reversed a large portion of their hiring after the Covid-19 pandemic.

Investment Banks have suffered a second year of falling fees due to a lack of dealmaking, and a decline in public listings. Wall Street is now trying to reduce headcounts as if it were a way to protect their profit margins.

The takeover by UBS of Credit Suisse has already led to at least 13,000 job cuts at the combined bank. Further large-scale redundancies are expected this year.

Silvermine Partners’ Lee Thacker said that there is “no stability, no investment and no growth” in most banks. “There are also likely to be some more job cuts,” he added.

Calculations show that 20 of the largest banks in the world will cut 61,905 positions by 2023. This compares to more than 145,000 jobs cut by the same lenders in the global economic crisis between 2007 and 2008.

The used company disclosures and its own reporting to compile the data and did not include smaller banks or minor staff cuts so the overall total of job losses in the sector will be higher.
In 2015 and 2019 large-scale job cuts were made by European lenders who struggled to cope with historically low interest rates. At least half of the reductions for 2023 came from Wall Street banks, whose investment bank businesses struggled to keep up with the rapid rise in interest rates in the US and Europe.

Many of these lenders are reversing the hirings they made in the wake of the pandemic, when the pent-up need for dealmaking ignited a talent war between investment banks.

The biggest cuts were made by UBS, a Swiss bank that began to swallow its former competitor.

Market watchers predicted that within hours of Credit Suisse’s rescue in march, the largest banking merger since financial crisis would lead to tens or thousands of job losses.

Credit Suisse already had 9,000 positions to eliminate, but UBS would be cutting even more as it eliminated duplicates and closed down the investment bank of its former rival.

UBS announced in November that it has already reduced 13,000 jobs within the combined group. This leaves it with 116,000 employees. Chief executive Sergio Ermotti, however, has indicated that 2024 is the “pivotal” year for the takeover. Analysts expect thousands of jobs to be cut in the coming months.

Wells Fargo was the second biggest cutter in 2023. This month, it revealed that had lowered its global workforce from 230,000 to 12,000 employees. The bank reported that it spent $186mn in severance expenses alone during the third quarter, and 7,000 jobs were eliminated.

Charlie Scharf, the chief executive of the bank, announced that it had set aside up to $1bn in severance expenses. This suggests that tens and thousands more jobs could be at risk.

In 2023, after a short break since the beginning of the pandemic, the other Wall Street banks resumed their annual redundancy programs.

Citigroup has cut 5,000 positions, Morgan Stanley 4,800, Bank of America 4,800, Goldman Sachs 3200, and JPMorgan Chase 1,00. The big Wall Street banks will collectively cut at least 30 000 staff by 2023.

“The revenues don’t exist, so this is a part of a reaction to overexpansion.” “But there’s also a simple explanation: political cost cutting,” said Thacker. If you are in charge of a division, and your boss wants to make savings, then you either cut back or get fired.

In January 2022, Christian Sewing, the chief executive of Deutsche Bank, said that he was “very worried” about the fact that the fierce competition for hiring staff has driven up the remuneration cost on Wall Street. The pay there rose almost 15% over the past 12 months.

A lack of deals has forced lenders, in less than two-years time, to streamline their investment banking.

Coalition Greenwich’s data, a benchmarking group for financial services, shows that the largest investment banks have cut their staff by 4% in just the first half of this year, and more will be done in the second.

The reductions in revenue were more dramatic, but the cuts in costs were less severe. According to Gaurav Arora of Coalition, the global head for competitor analytics, the banks are optimistic that dealmaking will resume in the coming year.

He said that some banks were hesitant to invest at this time because they had so much dry powder on the sidelines. This was especially true in the Americas.

Metro Bank in the UK has announced plans for a five-percent reduction of its staff.

In October, the high street lender was saved in a refinancing agreement worth £925mn after it had run into financial trouble a few months earlier when the Bank of England refused to grant capital relief on mortgage lending until 2024 at least. This left a capital gap.
Metro now targets annual savings of £50mn per year, up from the previous goal of £30mn. This will result in branch closings and up to 800 employees leaving.

Some large banks, such as HSBC and Commerzbank who have both made massive reductions in staff numbers in recent years, did not cut back on their workforce in 2023.

UniCredit Italy, the second largest lender in Italy, has not announced any major redundancy rounds for 2023. The bank, which also reduced its headcount during the last two years to improve efficiency, is a part of a larger effort.

The number of full-time staff dropped by around 10% — or 7,700 people — over the past two years. It also set aside €300mn in restructuring costs to fund up to 1,000 voluntary resignations.

The outlook for banking jobs in the world is not likely to improve this year, unless there’s a rebound in investment banking.

Arora, Coalition’s Arora, said: “We expect the full-year of 2024 to continue on from 2023.” “We are seeing banks becoming more conservative.”