JPMorgan will eliminate 5,000 jobs or 2% of its workforce next year as part of its initiatives to reduce costs and become more efficient, according to report from Wall Street Journal based on people familiar with the situation.
The stock price of JPMorgan was slightly down to $65.86 per share around 1:01 in the afternoon in New York.
Chairman and CEO Jamie Dimon announced the bank’s cost-cutting initiatives during the JPMorgan Healthcare Investment Conference in January. FOX Business Network (FBN) Senior Correspondent Charles Gasparino also reported in March that the bank was preparing to reduce its workforce over the next year, as we noted at the time.
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Sources told the Wall Street Journal that JPMorgan already started the job cuts as the broader banking industry moves toward the internet and mobile banking. At least 1,000 employees were already terminated over the past few months, according to one of the people familiar with the situation.
JPMorgan to layoff tellers at its branches
The report indicated that JPMorgan will streamline its 5,570 branches as consumers frequently use technology to complete their transactions. Dimon said an average JPMorgan branch could lose two tellers and add one financial adviser.
JPMorgan’s job cuts will affect its major business units including corporate and investment banking, consumer and community banking, asset management and commercial banking. The bank will also eliminate jobs in its departments that have grown significantly over the past few years, according to the people familiar with the situation.
Last year, JPMorgan eliminated 7,900 mortgage jobs. The bank also exited several of its businesses. The bank already reduced the number of its workforce to 241,145 employees as of March 31. JP Morgan’s headcount was down 20,000 or 7% from its highest level in the first quarter of 2012.
JPMorgan aims to automate work using sophisticated technologies
JPMorgan aims to automate work using more sophisticated technologies such as new ATMs or faster trading capabilities. According to Dimon, “It’s cheaper for us and good for clients.”
Last year, JPMorgan relocated employees to less expensive space. The bank also changed third party contracts as part of its cost-cutting measures. JPMorgan expects its expenses to decline to approximately $57 billion this year from $58.5 billion in 2014.
JPMorgan CFO Marianne Lake recently stated, “We won’t compromise investment dollars to improve short-term efficiency or performance.” She also emphasized that maintaining strong controls is one of the bank’s priorities.