JPMorgan (JPM) Slashing 40 IB Positions in North America
JPMorgan JPM is slashing 40 investment banking (IB) jobs in North America as part of a global workforce reduction plan. This was first reported by Bloomberg.
The primary reason behind the cuts is the plunge in global dealmaking activities. Economic uncertainty and higher interest rates have been affecting IB division performance for more than a year now.
Per a source familiar with the matter, the cuts are going to impact all positions, seniors as well as juniors. Similar to this, last week, JPMorgan axed 20 IB positions across the Asia region.
In May, the New York-based company eliminated 500 roles across various departments. In the same month, it also announced plans to lay off 1000 employees from the First Republic Bank. First Republic Bank was acquired by JPM in early May after it was seized by the regulators. Those job cuts were part of the integration process.
JPMorgan's chief operating officer and president, Daniel Pinto, had warned last month that IB revenues are expected to decline 15% in the second quarter of 2023 on a year-over-year basis.
Though the company’s IB fees plunged 59% in 2022 and 18% in the first quarter of 2023, it is likely to rebound and grow at a decent pace once the macroeconomic and geopolitical ambiguity improves. Pinto stated, "We have a period now of low volatility, but I don't think that the situation will stay for the rest of the year."
Over the past six months, shares of JPM have gained 5.4% against the industry’s fall of 7.6%.
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JPM carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Similar to JPMorgan’s efforts to survive the deal slump by slashing jobs, global banks like Citigroup C and The Goldman Sachs Group, Inc. GS have also been taking such steps.
This month, in its latest round of staffing reductions, C will likely cut 30 IB jobs and 20 more in its corporate banking unit in London. The news was reported by Financial News.
GS is firing 125 managing director positions across the globe in response to the industry-wide plunge in dealmaking activities, per a Bloomberg article that cited people familiar with the matter.
GS is also eliminating more than 30 IB positions, per a Reuters article earlier this month.
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