JPMorgan Chase swings the ax at 19,000 jobs
CEO Jamie Dimon is focusing the cost-cutting measure primarily on the bank's mortgage business, where past troubles are still weighing amid rising competition.
As Bloomberg News and others have noted, Dimon said during the company's Investor Day on Tuesday that about 4,000 of these cuts will come this year. Overall, the layoffs would equal more than 7% of its staff of 295,000. According to Bloomberg, the banking giant will slash 13,000 to 15,000 mortgage jobs through 2014, and 3,000 to 4,000 jobs in community banking. Most will be eliminated through attrition. Ongoing hiring will offset the total over that time, with the net being around 4,000 fewer positions, according to a JPMorgan spokesperson.
Dimon is known to be maniacal about reducing costs, and it's easy to understand why he would target those businesses.
Earlier this year, the New York-based bank agreed to pay $753 million to a set up a fund to assist borrowers whose homes were wrongly foreclosed. The company also agreed to spend $1.2 billion on foreclosure prevention. Meanwhile, competition in mortgage businesses is intensifying as historically low interest rates are spurring a housing market rebound. JPMorgan also recently revamped the management of its consumer and community banking business as part of a wider corporate overhaul.
The bank's board slashed Dimon's 2012 pay by 50% in the wake of the London Whale trading scandal that cost $4 billion. However, he still earned a $10 million bonus, which probably took the sting out of getting his wrists slapped.
Shares of JPMorgan slid lower in early Tuesday trading by around 1%. The shares have surged almost 29% over the past year.
Goldman Sachs (GS), Morgan Stanley (MS) and Citigroup (C) have also recently announced job cuts.
--Jonathan Berr doesn't own shares of the listed stocks. Follow him on Twitter @jdberr.
"Jamie Dimon is focusing the cost-cutting measure primarily on the bank's mortgage business"
Because heck, we're all about trading, the stock market, and lending to hedge funds now anyway.
ENJOY YOUR SOUP LINES!!
I SHOULD SAY HOT WATER LINES!!!
It's really sad that a guy like Dimon is still working. It's sad that that board of directors are still in their positions. It's really sad that more average wage earners will pay for the mess that these
banks brought upon themselves and the country. Add to that how sad it is that out bought and paid for politicians won't legislate cearer paths for banking, nor create laws that would jail the likes of Dimon and the other white colar thieves that are still working and building fortunes.
Every day it's the same Obama lovers whining about big bad corp America. That jealous flavor that Obama has poisoned the Passionately Divided States of America with will never accomplish anything positive. We experienced gridlock for 4 years from a leaderless Prez that can only comprehend Robin Hood's "steal from the rich and give to the poor" theory. His redistribution solutions taint every proposal he has. Yet 51% voted for more gridlock, more stagnation, still no jobs, and 4 more years of unnecessary suffering.
We are way overdue on giving up on his foolish sophomoric approaches. They are not solutions and never had a chance of working.
DoddFrank and the Consumer Financial Protection Bureau has a lot to do with the loss of jobs. Everyone close to the financial industry knows that DoddFrank's onerous regulations are inhibiting lending - especially to those that could really benefit from starting over at real estate prices below cost and record low interest rates. Who needs employees when you aren't making loans (or at least only making loans to the very wealthy who are actually buying up rental real estate as fast as they can and mostly with cold hard cash).
Time will prove that Obama and DoddFrank are accomplishing the largest transfer of wealth in history - a shift from the middle class to the wealthy that are now renting those same homes back to the middle class for a far better return than a 4% mortgage. Clear evidence the system is broken - DUH.
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