The largest US banks significantly reduced their combined workforce last year, marking the most substantial decrease in almost a decade. This move reflects executives’ efforts to control costs, particularly in light of rising compensation expenses. The six biggest firms – JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs Group, and Morgan Stanley – collectively employed 1.09 million people at the end of December, a decrease of approximately 10,600 from the previous year. This is the lowest staffing level seen since 2021 and the largest job cut since 2016, when the group reduced headcount by roughly 22,000.
Efficiency has become a key focus on Wall Street. Many banks expanded their teams during the pandemic-driven deal boom, only to face the need for job cuts following a significant slowdown that started in 2022. Now, the focus is shifting to the potential for artificial intelligence to replace human roles.
Wells Fargo, a financial services company, was the primary driver of these reductions, decreasing its headcount by over 12,000 during the year, under the leadership of CEO Charlie Scharf. Wells Fargo’s headcount at year-end was 205,198, the lowest since its acquisition of Wachovia during the 2008 financial crisis. Citigroup, a global investment bank and financial services corporation, also reduced its workforce by 3,000 employees. Further cuts are expected, according to a memo from CEO Jane Fraser.
Despite the overall trend, some firms increased their staffing levels. Goldman Sachs, for example, expanded its headcount by 2 per cent to 47,400, citing higher compensation expenses as a key factor in its 11 per cent increase in total costs. Morgan Stanley also ended the year with approximately 2,500 more employees, despite earlier cuts in March.
