The banking industry in the United States is facing significant challenges, as the largest banks are laying off employees and closing branches amidst a looming financial crisis. Despite being the most profitable bank in the country, JPMorgan Chase is the exception, with other lenders cutting their workforce and announcing future plans to do so. This trend is being driven by higher interest rates, which are negatively impacting the mortgage business. As a result, US banks have already cut a combined 20,000 jobs this year.
This situation is a cause for concern, as these job losses could have broader implications for the US labor market in the coming year. With rising defaults on corporate and consumer loans, banks may need to make deeper cuts to protect their earnings. The uncertain outlook for the future is leading banks to find ways to reduce costs and allocate funds for potential loan losses.
US Banks Quietly Close 100s of Branches, Lays Off 1000s of Workers https://t.co/9bnHNBZZSj
— 🇺🇸🇺🇸Josh Dunlap🇺🇲🇺🇲 ULTRA-MAGA (@JDunlap1974) October 23, 2023
The decline in headcounts has been particularly significant at Wells Fargo and Goldman Sachs, both of which are experiencing revenue declines in key business areas. Wells Fargo, in particular, has been restructuring its operations away from the mortgage business, resulting in job cuts. While Goldman Sachs has already undergone several rounds of layoffs, the bank continues to reduce its workforce further.
Overall, the banking industry is facing significant challenges, and these layoffs and branch closures indicate the severity of the situation. The economic conditions are steadily deteriorating, as seen in the decline of leading economic indicators over the past 18 months. With the risk of a recession in the first half of 2024, it is clear that the banking industry is in big trouble.