Banks are preparing to lay off tens of thousands of workers in an industrywide bloodbath that’s expected to become Wall Street’s largest since the 2008 financial crisis, according to a report.
The mass firings are looming after banks built up their workforces over the last two years as mergers and acquisitions, initial public offerings and SPACs flooded in.
At the same time, most banks had halted their annual culling of 1% to 5% during the pandemic. Now, some banks are facing investment banking revenues that have been cut in half even as payrolls have ballooned.
Goldman Sachs, Morgan Stanley, Credit Suisse and Bank of New York Mellon have already slashed more than 15,000 jobs combined over the past few months, the Financial Times reported. Those cuts could be just the beginning, according to some industry insiders.
“Banks hired in a crazy fashion over the last few years,” John Breault, CEO of recruiting firm Breault & Smith, told The Post. “So far these layoffs have been normal retrenchment but things could get worse.”
Goldman Sachs, which is often seen as one of the more aggressive banks when it comes to slashing its workforce, cut roughly 3,200 employees or 6.5% of its employee base earlier this month — a move that could also be putting pressure on other banks to follow suit, insiders suggest.
“Other bank executives are being asked, do we have our headcount at the right level given economic conditions?” Breault said.
Although Goldman cut a similar amount of staff following the financial crisis, the size of the bank was closer to 33,000 employees — far smaller than the nearly 50,000 employees Goldman had just a month ago.
Last month, Morgan Stanley axed roughly 1,800 employees — closer to 2% of its global workforce. The company’s CEO James Gorman said the bank was “frankly a little overdue” for a trim since it hadn’t “done anything for a couple years.” Bank of New York Mellon, the Financial Times reports, is making smaller cuts — getting rid of roughly 1,500 employees or 3% of its workforce.
Some banks have yet to announce any cuts. Bank of America CEO Brian Moynihan said the company didn’t “have any plans for mass layoffs.” Moynihan said there may be a slowdown in hiring — but nothing beyond that.
Citigroup has yet to address whether it will lay off employees, but its chief financial officer, Mark Mason, acknowledged “where necessary to restructure, we do that as well.”
Credit Suisse will see the most dramatic cuts: The Swiss bank is cutting 9,000 roles from its 52,000-person workforce — or 17% — as the troubled bank tries to restructure.
Of course, layoffs typically happen at the least convenient time for workers to find another job.
“You have this horrible flood of quality coming onto the market, but who picks them up?” Thacker told the Financial Times. “The bayside isn’t there to hire these people this time. They just don’t have the capacity.”