Despite the 'undercurrent' of layoffs, America's richest bank remains out of the picture

CNBC news agency reported on October 19 that the largest US banks have been quietly laying off employees throughout the past year, but some of the deepest cuts have yet to happen.

Over the past year, major US banks have quietly laid off employees, except for JPMorgan Chase. (Source: Reuters)

Even as the economy surprises forecasters with its resilience, lenders have cut staff or announced plans to do so, with the exception of JPMorgan Chase, the largest and most profitable U.S. bank.

The five largest US banks have cut a total of 20,000 jobs this year, according to bank reports, under the impact of high interest rates on mortgage business, capital costs and Wall Street trading, with Wells Fargo and Goldman Sachs cutting about 5% of their workforce.

A key factor driving the cuts is that job-hopping in the financial sector has slowed significantly compared to previous years, leaving banks with more staff than expected.

JPMorgan Chase, meanwhile, is an exception. This year, JPMorgan Chase has increased its headcount by 5.1% due to branch expansion, heavy investment in technology and the acquisition of First Republic Bank. It is the only bank among the six largest US banks to have a significant stock price gain this year.

Banks are cutting costs as much as they can because of the real uncertainty about the coming year, said Chris Marinac, director of research at Janney Montgomery Scott. Meanwhile, job losses in the financial sector could weigh on the U.S. labor market through 2024.

Faced with rising defaults on corporate and consumer loans, banks are poised to cut rates further next year.

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