J.P. Morgan to Cut Thousands of Jobs


J. P. Morgan Chase has announced plans to cut 17,000 jobs over a two-year period and cut $1 billion of expenses this year.  The announcement was made at an Investor Day presentation in New York.  The bank employs nearly 260,000 people worldwide.  Over the past several years, CEO Jamie Dimon reportedly had been adamant that J. P. Morgan did not need an expense reduction plan (“J.P. Morgan’s Investor Day: Cut That Headcount,” by David Benoit, Wall Street Journal).

Previously, J. P. Morgan had announced plans to cut 15,000 jobs by the end of 2014.  It is unclear whether any of the previously announced 15,000 cuts are included in the 17,000 cuts that were announced at the Investor Day presentation.

J. P. Morgan is the country’s largest lender by assets and was the most profitable U.S. bank in 2012.  The cuts will decrease the number of employees by 6.5%, making J. P. Morgan the smallest (by number of employees) of the large U.S. banks, which include Bank of America, Citigroup and Wells Fargo.  Bank of America has announced plans to cut more than 30,000 jobs. Citigroup said last year it would cut 11,000 jobs (“J. P. Morgan to Cut 17,000 Jobs,” by Matthias Rieker and Dan Fitzpatrick, Wall Street Journal).

J. P. Morgan said 4,000 of the cuts will occur this year and 13,000 next year.  The reductions will be made primarily in consumer banks and the units that handle residential mortgage lending, according to the article.

New regulations regarding transparency, clearing rules and margin rules may reduce J. P. Morgan’s already flat total revenues by $2 billion according to a co-head of investment banking at J. P. Morgan.  Low interest rates have reportedly lowered lending and investment revenues at the bank.

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