U.S. banking giants continued to shed employees in the first quarter, with Citigroup C-N seeing the biggest drop.
Headcount at Citi declined by 2,000 employees after the third-largest U.S. lender completed a sweeping reorganization aimed at improving profits and reducing management layers.
Headcount at Bank of America, Wells Fargo and PNC Financial declined by about 2,000 jobs combined in the three months ended March 31 compared with the previous quarter.
Banks are under pressure to control costs due to the uncertain economic outlook. While investors are still expecting the Federal Reserve to tame inflation while avoiding a major economic slowdown, expectations remain in flux about the potential for interest-rate cuts later this year.
Citi’s reductions were part of a total 7,000 job cuts that will be reported in upcoming quarterly earnings as employees complete their notice periods, its Chief Financial Officer Mark Mason told reporters on Friday.
The layoffs were part of a broader goal to reduce Citi’s staffing by 20,000 over the next two years.
Industry executives acknowledged the challenges in navigating the changing rate environment. Analysts said higher funding costs, contracting net interest margins and uneven trading results were likely to keep banks cautious.
“We managed headcount,” Bank of America CEO Brian Moynihan told analysts on Tuesday. “We noted the expectation in January of last year that our headcount will be down throughout the year,” he said. The second-largest lender has largely reduced staffing through attrition, or not filling positions when employees leave.
Its headcount has fallen by more than 4,700 from the first quarter of 2023, Moynihan said.
Across Wall Street, investment banks brought in higher revenue, fuelled by a revival in capital markets. Executives have become more optimistic that a surge in equity offerings will lift sentiment and spur mergers and acquisitions.
That would bolster the outlook for Goldman Sachs and Morgan Stanley, where headcount shrank by 900 and 396, respectively. Morgan Stanley’s finance chief Sharon Yeshaya told analysts on Tuesday the investment bank was still making “opportunistic hires.”
In 2023, rival Goldman Sachs undertook its biggest round of layoffs since the global financial crisis of 2008.
JPMorgan Chase, however, went against the trend. The largest U.S. bank continued to bolster its ranks, adding nearly 2,000 employees in the first quarter to a total of 311,921.