The bank aims to cut costs by $45 million in 2024.
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Comerica plans to lay off 250 employees and close 26 branches in the fourth quarter as part of a multimillion-dollar cost-cutting plan to control rising expenses.
Executives at the Dallas-based financial giant announced the layoffs during its fourth quarter earnings call on January 19th. Overall, the bank recorded $25 million in severance benefits related to the workforce reductions. A bank spokeswoman said the bank has laid off 28 employees in Dallas-Fort Worth.
Chief Financial Officer Jim Herzog said Comerica (NYSE:CMA) has “streamlined” its operating structure and “selected He said that he was abolishing “the role that was previously held.” He described the cuts as “gradual steps to realign expenses to support investment and revenue growth.”
“Through this process, we are prioritizing our customers and positioning our business for future success,” said Herzog.
Comerica has cut more than 3% of its workforce through layoffs. The company employed 7,667 people as of September 30th. Despite the layoffs, Comerica also added staff in the fourth quarter, with 7,701 employees as of Dec. 31.
The bank plans to close branches across Michigan, Texas, California and Arizona, but did not disclose specific locations. Herzog said Comerica will close branches that it determines have a “nominal customer impact.” The bank had 408 branches as of Dec. 31, 55 of which are located throughout DFW. A bank spokesperson said none of its branches in DFW are affected.
In addition to layoffs and branch closures, Comerica plans to optimize its product offerings and renegotiate certain third-party agreements. Overall, Herzog said cost-cutting measures will reduce expenses by $45 million in 2024 and $55 million in 2025.
“These decisions are challenging and not taken lightly, but we feel they are necessary to support the sustainable growth of our business,” Herzog said.
Chief Executive Curt Farmer had previously hinted in the fall that the bank might lay off employees to deal with rising costs and sluggish profits due to soaring interest rates. It's not just banks. Other financial giants, including Goldman Sachs Group Inc., Charles Schwab & Co. and Citigroup Inc., also laid off thousands of employees last year. Citigroup recently announced it will lay off 20,000 employees over the next two years.
“The industry as a whole went through an inflection period in 2023 and experienced some degree of readjustment,” Farmer said during an earnings call on January 19. “We have sought to consider the balance of what we believe drives our revenue and will continue to drive our revenue.
According to a report by Chicago-based outplacement firm Challenger, Gray & Christmas, layoffs surged across the U.S. last year, with companies cutting 721,677 jobs, a 98% increase from 2022. Announced. The total number of layoffs was the largest since 2020, when the new coronavirus infection spread. More than 2.3 million people have been laid off due to the pandemic.
Excluding 2020, last year's job cuts were the largest since 2009, when companies announced more than 1.2 million layoffs.
Farmer said that despite the layoffs, Comerica will continue to invest capital in growth areas such as treasury management, payments, capital markets and asset management. The bank will also continue to focus on small businesses and expansion into new markets in the Southeast and Colorado.
“We're really looking to play the long game here and we want to continue to focus on those as we try to get past the immediate environment that we're operating in,” Farmer said.
Comerica reported fourth-quarter net income of $33 million, or 20 cents per share. For the full year, the bank's profit fell 23% from 2022 to $881 million, or $6.44 per share.
The bank had assets of $85.8 billion, deposits of $66.8 billion and loans of $52.1 billion at the end of 2023.
Editor's note: This article has been updated with information from a Comerica spokesperson regarding layoffs in the Dallas-Fort Worth metro.
