Some of the world’s largest banks and financial institutions are cutting their head counts to tighten budgets amid uncertain economic times, and the phenomenon has hit New Jersey.
Data from state filings showed that five financial institutions announced New Jersey layoffs so far in 2024: The Bank of New York Mellon Corporation, TD Bank, Prudential Financial, Citibank and JPMorgan Chase Bank.
Those come on the heels of financial sector layoffs that took place or were announced in 2023 by JPMorgan Chase Bank, Prudential Financial, TD Bank and Charles Schwab.
Some of those banks — including Citibank and Charles Schwab — are cutting their head counts by the thousands or tens of thousands.
Charles Schwab is cutting 2,000 employees and Citibank 20,000 of its staff.
“Banks are reducing back-office costs, and this includes people and head count reductions, unfortunately,” said Christopher Marinac, director of research at Janney Montgomery Scott, a financial services firm. “Overall, bank earnings are stable and generally not growing. Further, bank balance sheets are not expanding much this year.”
One factor? The Federal Reserve, which has raised interest rates 11 times since the COVID-19 pandemic. That pushed mortgage rates higher for homebuyers, meaning fewer people obtained mortgages, prompting Wall Street to respond with layoffs, said a report by CNBC.
That resulted in the state’s first job losses in half a year, unemployment figures show.
“Banks are being careful on new lending and trying to retain more capital as the Federal Reserve is tightening standards and raising capital requirements soon,” Marinac said.
James Hughes, an economist at Rutgers University, told NorthJersey.com that white-collar jobs in banking and finance have become saturated after a two-year hiring spree that followed the COVID-19 pandemic.
Layoffs by the numbers
These financial services companies announced New Jersey layoffs in 2023:
- JPMorgan Chase Bank: 63 jobs.
- TD Bank: 88 jobs.
- Prudential Financial: 46 jobs.
- Charles Schwab: 109 jobs.
These are the New Jersey banking layoffs announced so far in 2024:
- The Bank of New York Mellon Corporation: 62 jobs.
- TD Bank: 54 jobs.
- Prudential Financial: 145 jobs.
- Citibank: 187 jobs.
- JPMorgan Chase Bank: 91 jobs.
JPMorgan, widely considered the country’s largest bank, was one exception to this trend, with some hiring despite its job cuts in New Jersey this year.
A spokesperson said there are 12,000 employees working in the state — 10,000 of them in Jersey City — with 600 open positions. The company spokesperson said JPMorgan Chase Bank added 17,000 jobs last year, on top of 11,000 open positions. It announced plans in 2022 to lay off hundreds of employees in the mortgage department.
The head count at JPMorgan has grown 21% since the pandemic in 2020, its annual report said.
Daniel Munoz covers business, consumer affairs, labor and the economy for NorthJersey.com and The Record.
Email: [email protected]; Twitter:@danielmunoz100
