The number of full-time employees at the six largest U.S. banks collectively fell fractionally in the first quarter, reversing a positive trend in a sign of a cooling economy, according to updates this week.
The banks disclosed a total of 1,117,602 people on their collective payrolls as of March 31, down about 0.2%, or 2,569 people, from 1,120,171 on Dec. 31.
Goldman Sachs Group Inc.
GS,
reported the steepest percentage drop of 6.4% as it carried out announced plans to downsize. Wells Fargo & Co.
WFC,
was next with a 1.1% drop and Morgan Stanley
MS,
trimmed slightly, while JPMorgan Chase & Co.
JPM,
and Bank of America Corp.
BAC,
added jobs fractionally. Citigroup Inc.
C,
remained flat.
Terrence Horan/MarketWatch
Looking ahead, banks signaled they remain cautious on hiring but didn’t hint at any steep job cuts, either.
Bank of America CEO Brian Moynihan told Bloomberg TV on Thursday that the bank is not planning any layoffs. He said, however, that it would “drift down” on attrition.
“Imagine last year versus this year — you had to grab any human being that you could hire last year at this time,” Moynihan said. “This year it’s completely different. Our attrition rate has dropped in half.”
After hiring 38,000 people last year in all of 2022, Bank of America has only hired 5,000 people so far in 2023.
“We’ll probably hire 10,000 or 12,000 people this year and the head count will come down,” Moynihan said. “That’s how fast you had to turn the engine on and then turn it off. When you have half the attrition … think about how much less you have to hire. That’s good news for the company because that’s a lot of inefficiency to get people up to speed.”
Outside of the megabanks, larger regional banks are also taking a close look at head counts for 2023.
Many banks are facing tighter profit margins in some of their business lines as interest rates rise. While higher rates allow banks to raise interest rates on loans, lenders also face a higher cost of capital at a time when many consumer borrowers find themselves unable to afford car- or home-financing rates.
Huntington Bancshares Inc.
HBAN,
CFO Zach Wasserman told MarketWatch the bank plans to keep its head count about flat for 2023. The bank will focus on adding staff in “key areas of growth” such as payments, capital markets and geographical expansion, he said, while seeking out ways to find efficiencies in other parts of its business.
“The economy will grow at a slower rate for a period of time,” Wasserman said. “You have to keep expense growth relatively lower. The best firms find efficiencies to reduce expenses while investing in attractive areas.”
Huntington Bancshares ended the first quarter with about 20,200 employees, up 1% from 20,000 at the end of the fourth quarter.
Also read: Jobs added at Morgan Stanley, Bank of America, Citi and JPMorgan but cut at Wells Fargo and Goldman
