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.

By Jonathan Berr Feb 26, 2013 1:01PM
JPMorgan Chase & Co. signage at a bank branch in New York on July 6, 2012 (© Scott Eells/Bloomberg via Getty Images)JPMorgan Chase (JPM) expects to slash 19,000 jobs in its mortgage and community banking businesses. That makes Chief Executive Jamie Dimon the latest Wall Street honcho to announce cost-cutting measures as the economy continues its slow crawl out of the worst hole since the Great Depression.

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.
47Comments
Feb 26, 2013 4:50PM
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After working in Corporate America for 24 years and barely surviving many layoffs, I understand what Dimon is doing here.  He IS trying to save their business and he is doing it through attrition which is better than cutting young people who are just trying to earn a living.  Here is the reality of it:  If you are over 55 and not prepared for retirement then you never will be.  Start saving while you are young and never stop.  Prepare for the worst to happen to you while working.
Feb 26, 2013 5:24PM
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Banks took a lot of money from the Feds and paid it back. But the return of that investment to the taxpayers was lost in that most of those same banks laid off thousands. Some totals are close to 100,000+ over the last 6 years. That would be OK but the jobs market is dismal at best. It cost the taxpayers a lot more in the long run and the board got pay increases, bonuses, and golden parachute perks. A lot of those that got laid off couldn't find work making them draw unemployment, had to take pay cuts on jobs they did find, lost health insurance, probably some marriages, some lost their homes (adding to the mortgage problem), went on Social Security early, etc. To me the banks were the worst in the aid they received because of the losses and the elite few that were rewarded. Probably a lot of politicians had some rewards also but we will never know.
Feb 26, 2013 5:21PM
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I guess our taxpayer money only helped pay bonuses.
Feb 26, 2013 5:14PM
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I wish J.P would shut their doors for good. Just one more corrupt corporate monopoly coddled by the government ! 
Feb 26, 2013 5:04PM
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legalizing 11 million illegal's should really help these people to find a job, thanks obama your really an idiot. their also was another bank laying off 4000 i seen in this section this morning.
Feb 26, 2013 5:20PM
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"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. 

Feb 26, 2013 5:33PM
Feb 26, 2013 6:25PM
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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.

Feb 26, 2013 4:58PM
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i blame increase in in taxes  and the national debt and fact that interest rates are going up because the fed is creating a unreal rate which could cause the next banking crisis.
Feb 26, 2013 7:22PM
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Just a sign of the times! We as people and our government should have let all the big ones fail!! I think we are headed for even more devastating time in the not to distant future!!
Feb 26, 2013 6:24PM
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It certainly is the Great Recession.  Obama said, in 2008, he would take responsibility for the economy these are his words.  About half the voting population voted for Obama the second time in spite of his poor performance.  There will be more layoffs to ensue.  This is only the beginning of the next downturn.  I believe it would have been fair if JP looked at every car in the parking lot that had a Obama and Biden sticker and laid them off first.  Give them what they want.
Feb 26, 2013 6:41PM
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Wow, this is going to look bad for Obama,. I'm sure he classified all the banker's positions as green jobs since there aren't millions of people woking in solar and windmill farms.
Feb 26, 2013 5:52PM
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Good! Fire 'em all! I could give a sh**!
Feb 26, 2013 5:09PM
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Is it normal attrition for a big bank to lose 7% of its work force over a two-year period?  I don't know if it is, but it seems high in this economy.
Feb 26, 2013 7:54PM
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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. 

Feb 26, 2013 6:46PM
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someone(mgmt) wasn't minding the store and  for quite a while if you have to cut that many people
Feb 26, 2013 7:46PM
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The day after an article claiming unemployment numbers are going down watch!
Feb 26, 2013 8:02PM
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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.

Feb 26, 2013 5:16PM
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this is pretty sad.  i am familiar with jpmorganchase.

mortgage business hurting in major areas/regions.
i have seen it all before.

count the number of existing casualties.

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