Some of the world's largest banks and financial institutions are cutting jobs to tighten budgets amid economic uncertainty, a phenomenon that is hitting New Jersey.
Bank of New York Mellon Corporation, TD Bank, Prudential Financial, Citibank and JPMorgan Chase Bank are among the financial institutions that have announced layoffs in New Jersey through 2024, according to data in state filings. There are 5 companies.
These follow on from financial sector job cuts implemented or announced in 2023 by JPMorgan Chase Bank, Prudential Financial, TD Bank, and Charles Schwab.
Some of these banks, including Citibank and Charles Schwab, are cutting thousands or even tens of thousands of jobs.
Charles Schwab will cut 2,000 employees, and Citibank will cut 20,000.
“Banks are cutting back-office costs, and unfortunately that includes layoffs and layoffs,” said Christopher Marinak, director of research at financial services firm Janney Montgomery Scott. “Overall, bank earnings have been stable and generally not growing. Additionally, bank balance sheets have not expanded much this year.”
Is it one factor? The Federal Reserve has raised interest rates 11 times since the coronavirus pandemic. This has caused mortgage rates to rise for homebuyers, fewer people are taking out mortgages, and Wall Street has responded by cutting jobs, CNBC reports.
According to unemployment statistics, this was the state's first job loss in six months.
“Banks are being cautious about new lending and looking to hold more capital as the Federal Reserve tightens standards and will soon raise capital requirements,” Marinak said.
James Hughes, an economist at Rutgers University, told NorthJersey.com that white-collar jobs in banking and finance have become saturated due to the two-year surge in employment following the coronavirus pandemic.
Headcount reduction in numbers
The following financial services companies have announced job cuts in New Jersey in 2023.
- JPMorgan Chase Bank: 63 jobs
- TD Bank: 88 jobs
- Prudential Financial: 46 jobs
- Charles Schwab: 109 jobs
Announced New Jersey banking sector layoffs through 2024 include:
- Bank of New York Mellon Corporation: 62 jobs
- TD Bank: 54 jobs
- Prudential Financial: 145 jobs
- Citibank: 187 jobs
- JPMorgan Chase Bank: 91 jobs
JPMorgan, widely considered the largest bank in the U.S., has been one of the exceptions to this trend, having made some hirings this year despite cutting jobs in New Jersey.
A spokesperson said the state employs 12,000 employees, 10,000 of whom are in Jersey City, and has 600 open positions. JPMorgan Chase Bank added 17,000 jobs last year, on top of 11,000 open positions, according to a company spokesperson. The company announced plans to lay off hundreds of employees in its mortgage division in 2022.
JPMorgan's headcount has increased 21% since the 2020 pandemic, according to its annual report.
Daniel Muñoz covers business, consumer affairs, labor and economics for NorthJersey.com and The Record.
Email: munozd@northjersey.com; twitter:@danielmunoz100
