Job losses at the largest US banks are on track to surpass 11,000 this year as Wall Street suffers its worst hiring market since the post-pandemic-era financial crisis.
Citigroup this week became the latest major U.S. bank to announce significant job cuts, telling investors it planned to complete 5,000 layoffs by the end of the second quarter, mostly in investment banking and trading. That followed cuts that hit thousands of bankers at Goldman Sachs and Morgan Stanley.
The job losses come as executives try to stem a hiring wave that began as the economy recovered in the wake of Covid-19. Banks dramatically expanded their workforces to cope with a boom in deals and commerce at a time when working from home was disrupting traditional ways of doing business.
At the end of the first quarter, the five major banks that dominate Wall Street – JPMorgan Chase, Bank of America, Morgan Stanley and Citi – together employed a record 882,000 globally, virtually unchanged from the end of 2022 and an increase of more than 100,000 versus end of March 2020.
The only bank to report a significant headcount reduction in the first three months of the year was Goldman, where headcount fell 6.4 percent to 45,400, the steepest drop in years. Morgan Stanley’s fell slightly to 82,266, while Citi’s remained flat. JPMorgan has not announced large-scale reductions.
Here’s what else I’m watching today and over the weekend:
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African peacekeeping mission: South African President Cyril Ramaphosa will lead leaders from Egypt, the Republic of Congo, Senegal, Uganda and Zambia on a visit to Ukraine and Russia in an ambitious bid to end the war.
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Economic data: The EU has released its harmonized consumer price index for the past month.
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Businesses: This is reported by investment bank Peel Hunt. Tesco chairman John Allan will step down today at the retailer’s annual meeting, while online property broker Purplebricks will delist from London’s AIM market.
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Celebrations: The UK celebrates King Charles III’s official birthday tomorrow with the Trooping the Color ceremony, while several countries celebrate Father’s Day on Sunday.
Five more top stories
1. Exclusive: Tech and media giants are in talks to make groundbreaking deals using news to train artificial intelligence. OpenAI, Google, Microsoft and Adobe have met with news executives in recent months to discuss copyright issues surrounding AI products such as text chatbots and image generators. These are the publishers involved.
2. BlackRock could run the US’s first publicly traded spot bitcoin fund if the filing with the US Securities and Exchange Commission is approved. The $9 trillion money manager already manages a private spot bitcoin trust it launched last year. Here’s how the move could be a bull’s-eye for the troubled crypto sector.
3. Exclusive: Rising demand in the US for wind and solar energy will increase the need for natural gas infrastructure to act as a back-up against blackouts, the boss of pipeline giant Williams Companies said, arguing that policies designed to increase electricity use in cars and heavy industry also put strain on the grid will increase.
4. The UK government is “not on track” to clear its asylum backlog this year, the National Audit Office has warned as record delays in processing applications have led to support costs nearly doubling to £3.6 billion in 2022-23. Read more about the 75,000 box pile-up.
5. The US banking regulator has kicked off the sale of Silicon Valley Bank’s German operations, seeking bids by July 19 for the collapsed lender’s loans, leases and other assets. Here are more details on the $460 million portfolio up for sale.
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News in depth
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Turkey’s new financial leadership faces a formidable challenge as it tries to pull its $900 billion economy away from the abyss. Finance Minister Mehmet Şimşek and Central Bank Governor Hafize Gaye Erkan will have to sharply increase borrowing costs and further depreciate the lira as the country’s war coffers are “dangerously” depleted by President Recep Tayyip Erdoğan’s unorthodox policies .
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Chart of the day
According to climate lobby group Transport & Environment, cruise ships in Europe pumped four times more harmful sulfur gases into the atmosphere than passenger vehicles last year. Barcelona is the worst affected port city in Europe in terms of sulfur oxide emissions, which have been proven to cause acid rain and can exacerbate respiratory problems.
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Take a break from the news
Downhill skateboarding is a breathtakingly dangerous sport. But skaters like Jenny Schauerte are part of a growing group of free spirits who travel the world in search of the perfect descent. Simon Usborne’s chilling piece takes you into their wild world.
Additional contributions from Benjamin Wilhelm and Gordon Smith
