Jobs Cut: Three American banks had crashed in the beginning of the year, which included Silicon Valley Bank, Signature Bank and First Republic Bank. However, America’s largest and profitable bank ‘Morgan Chase’ has not yet been included in the layoff list.
Big banks of America are silently laying off employees in the current year and it is expected that this trend is not going to stop here. Right now, layoffs on a larger scale may be seen in this industry. Even though the economy has surprised experts with its resilience amid the banking crisis in America, big banks have given an indication by laying off their employees that the situation in the banking sector still remains critical.
At the beginning of the year, three American banks had crashed, which included Silicon Valley Bank, Signature Bank and First Republic Bank. However, America’s largest and profitable bank ‘Morgan Chase’ has not yet been included in the layoff list.
Did Fed rates have an impact?
The five largest US banks have laid off a combined 20,000 employees so far this year, under increasing pressure from higher interest rates on mortgage business, Wall Street deal-making and funding costs, according to company filings.
Before this, during the Covid pandemic, hiring was done on a large scale for two years. From last year to July 2023, America’s central bank ‘Federal Reserve’ had aggressively increased interest rates to control inflation. Banks realized that they had more staff than they needed.
Next year full of uncertainties
Research director at Jenny Montgomery Scott said banks are cutting costs wherever possible as the next year is full of uncertainties. Banks disclose the total number of employees every quarter. During this period, the biggest layoffs have taken place in Wells Fargo and Goldman Sachs, which are currently struggling with decline in revenue. So far this year they have reduced the workforce by about 5%.
Layoffs going on in IT sector also
Amidst the uncertainty prevailing over the global economy, the process of layoffs first started in the IT sector. Global tech giants have cut down their workforce on a large scale, which include many names including Meta, Google.
While Google has laid off 10,000 employees, Meta has so far laid off more than 11,000 employees. Meanwhile, Indian edtech startup Unacademy has also laid off more than 1500 employees in four rounds.
