JP Morgan Chase & Co has announced that it would be axing 17,000 jobs over a period of two years, with bulk of the job cuts concentrated on consumer and mortgage businesses, in a move ritualised by most banks such as Barclays, charting out a turnaround strategy to battle losses. Out of the 17,000 job cuts, around 13,000- 15,000 jobs will be cut from the mortgage business by the end of 2014. The JP Morgan Chase job cuts amount to 7% of the total 259,000 workforce. JP Morgan Chase job cuts were announced at the company’s annual shareholders meeting held on Tuesday, where chief executive Jamie Dimon stated that an improving housing market, with fewer employees processing mortgage defaults, and new technology would lead to lower headcount.
The bank has hired staff in in asset management, private banking and commercial banking units to offset significant redundancies in the consumer banking businesses. The year saw JP Morgan Chase & Co being marred by $6bn (£3.9bn) of trading losses, which was raked up by a trader nicknamed “the London whale”. Acknowledging that the management shake-up was due to the incident, chief executive Jamie Dimon, said that the undesirable amount of lay-offs was a ‘little bit too much change in one year’. Despite the JP Morgan Chase & Co job cuts, Jamie Dimon assured that the bank would beat market estimates of net income of about $22bn (£14.5bn) this year and overcome headwinds from new regulations.
The job cuts at JP Morgan Chase & Co reflect the pressure that banks are under, even as the US housing market and overall economy show signs of recovery. Many banks are looking to automate more of their businesses to make their staff more productive and improve profits. For example, at JPMorgan’s branches, where it plans to cut about 6,000 tellers and other employees, the bank hopes customers will use automated teller machines for every day transactions and that remaining staff can focus on higher-margin activities like selling wealth management services.