bofa layoffs part of a larger banking trend

The recent Bank of America layoffs are just one piece of a larger puzzle. Many major banks are downsizing, with Bank of America being one of the biggest players.

Banks are facing increased competition from fintech companies and changing consumer behaviors. This shift has led to a decrease in demand for traditional banking services.

Bank of America has been hit particularly hard, with over 10% of its workforce let go in recent years. This is a significant number, and it's not just Bank of America that's feeling the pinch.

Bank of America cut 7,500 jobs in the first half of 2023, with most of the cuts going unnoticed.

At its peak, Bank of America had 218,000 people, but now it has 213,000, despite adding 2,500 campus hires.

The bank's headcount is down over 7,000 FTEs from a peak in January, even with the addition of 2,500 college grads this fall.

These cuts have been beneath the radar because, technically, very few were actually cuts. BofA is still practicing its hiring freeze strategy and is mostly letting people leave without replacing them.

The non-cuts at Bank of America are likely to continue, with the bank remaining committed to cutting another $200m from quarterly expenses.

Bank of America's quiet layoffs are a stark contrast to the more publicized job cuts at other banks, such as Credit Suisse, Goldman Sachs, and Morgan Stanley.

Bank of America's approach to layoffs is also notable for its lack of severance payments, unlike other banks that are spending hundreds of millions of dollars on severance payments.

These layoffs have also been low-key, with only a few BofA exits reported, such as a small number of London investment bankers cut in June and 40 bankers cut in Asia in May.

Bank of America isn't the only bank making cuts. Credit Suisse cut just over 4,000 people in the first half of 2023.

Goldman Sachs cut 3,200 people between January and the end of September 2023. Morgan Stanley said it was cutting 3,000 people, but its net headcount only dropped by 1,700.

Citi cut 2,000 people, a relatively smaller number compared to the others.

Citigroup has identified 7,000 job cuts linked to $600 million in "repositioning charges" disclosed so far this year.

The bank's CFO, Mark Mason, told analysts that these cuts are just the beginning, as CEO Jane Fraser's plan to overhaul the bank's corporate structure will further lower headcount in coming quarters.

Citigroup's staff figures have been stable at 240,000 this year, but the bank is not immune to the industry-wide trend of job cuts.

As the bank continues to progress with its divestitures, we can expect to see the headcount come down even further, according to Mason.

JPMorgan, on the other hand, has been expanding its branch network and investing in technology, leading to a 5.1% increase in headcount this year.

Goldman firings have been a significant concern in the banking industry. Goldman Sachs has cut roughly 5% of its workforce so far this year, following a strategic shift away from the mortgage business.

The bank's CFO, Mike Santomassimo, mentioned that there are "very few parts of the company" that will be spared from cuts. This suggests that the layoffs are widespread.

Goldman executives said they had "right-sized" the bank and don't expect another mass layoff like the one enacted in January. However, headcount is still headed down at the New York-based bank.

The bank will terminate around 1% or 2% of its employees in the coming weeks, according to a person with knowledge of the plans. This is a result of Goldman's pivot away from consumer finance.

Attrition has been remarkably low, and that's something that Goldman and other banks have to work through. This is a key factor driving the cuts, as job-hopping in finance slowed drastically from earlier years.

The recent forecast of US rate cuts has left many wondering what it means for the economy. The Federal Reserve has indeed signaled a potential rate cut, citing concerns over the ongoing trade tensions and slowing economic growth.

The economy has been slowing down, with GDP growth dropping to 2.1% in the second quarter of 2019. This is a significant decrease from the 3.1% growth rate seen in the same quarter of 2018.

The trade tensions between the US and China are a major contributor to the economic slowdown. The ongoing trade war has led to a decrease in exports and a slowdown in business investment.

The US rate cuts are expected to boost economic growth, but their effectiveness is still uncertain. The Fed has a history of using rate cuts to stimulate the economy during times of economic stress.

The rate cut forecast is also influenced by the recent layoffs at Bank of America, which has sparked concerns over the health of the financial sector.