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
May 29, 2013 12:57PM
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He's got to cut jobs to make up for all the money he lost oh wait the London whale lost. Bottom line is he screws up other people pay the more things change the more they stay the same
Feb 28, 2013 7:56PM
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It is not the fault of JP Morgan. It is the American people that voted for a welfare state and they got it. JP Morgan and the rest of corporate America have not laid anyone off. The American people have laid themselves off. Do not be surprised if your next check from Obama is written in Chinese or Russian. That is where Obama is borrowing the money from. Who is going to pay the bill when Russia and China refuse to loan anymore and they call the debt due? I suggest we give them California..
Feb 27, 2013 9:04PM
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$10 billion scandal....how does that happen?? daaaa!!
Feb 27, 2013 3:48PM
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Great company !!!  Great  stock !!!  Great leader !!!How many of you folks realize that JPMorgan and others like it PAY BILLIONS IN TAXES !!!  Wish we had hundreds more like JPM !!!  Stupid president and other media types can bad mouth banks and big businesses but they are the BACKBONE of our wonderful country !!!
Feb 26, 2013 9:07PM
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if a company has to lay off worker to stay open then no management may get a pay raise or bonus for five years. For if you don't place rules in place like this then greed men will layoff good workers just to line there pocket with more money. Taxpayers have help them save there jobs and they always say no to the workers and want the worker to pay for there bonus. how many companies have layoff workers only to give big bonus out.
Feb 26, 2013 8:46PM
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Just another sign of the current administrations failures.

 

Funny thing is, main stream media aka MSNBC wouldn't even report something like this if the election was still on and unemployment numbers made a difference.

 

So much for these 19,000 souls.

 

This is just the beginning of a lame duck presidency.

Feb 26, 2013 8:45PM
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That $10 million bonus could have gone a long way to secure the 19,000 jobs that are going to be lost due to miss handling of money...Too bad...The innocent fall by the wayside while the rich get richer. Perhaps Obuma will see it clear to do something to promote one job while running his campaign this year....He has done nothing to create a job so far and we are now in to our 5th year with this clown.
Feb 26, 2013 8:26PM
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First a couple of points,

1) With all 3 banks having double digit stock increases, how many shares have they sold at the peak?

2) What do they know if they plan on eliminating 19,000 jobs. Are we in for a major correction in the market?

3) While it sounds nice that the jobs lost will be through attrition, I guess we will have to add those to the jobs already lost to Asia.

4) Did they really pay back the taxpayers all the tarp money?

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 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 7:46PM
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The day after an article claiming unemployment numbers are going down watch!
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 7:21PM
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I thought it was 4,000. I saw an earlier article with that figure.
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 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 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 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 6:15PM
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New money is going into stocks that pay dividends, not Chase checking accounts that pay nearly nothing so change was bound to happen!! Of course, layoffs are equal to stock price going higher because less wages are being paid out. Could be worse. If we had a Republican President, he would be operating under the delusion that if he lets in another 60 million illegal aliens to rob us blind that maybe they will vote Republican. Under this scenario, civil war would break out over our taxes being paid out in HUGE benefits to illegals and JPMorgan Chase would be laying off a lot more people. We can't keep giving the country away without rebuilding infrastructure and preserving the jobs we have. Our system, which rewards illegals with free healthcare, housing, schooling, food and more just for flying the Mexican flag on their rearview mirror, can no longer sustain itself. We're imploding at home because of defective Republican decisions and burning money overseas. Politicians aren't hired to be aid workers. The free ride has to stop.
Feb 26, 2013 5:52PM
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Good! Fire 'em all! I could give a sh**!
Feb 26, 2013 5:48PM
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Up from 4000 this morning aye MSN...
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