UPDATE: Oct. 2, 2020: Less than 24 hours after Goldman Sachs and JPMorgan Chase both said they were resuming job cuts — joining Citi and Wells Fargo in that stance — Bank of America CEO Brian Moynihan took time to reiterate that his bank will not.
"We've said no layoffs for this year and we'll stick by that," Moynihan told Bloomberg on Thursday. Moynihan was quick to initially make that vow in March, shortly after Morgan Stanley CEO James Gorman promised the same.
Moynihan said Bank of America is temporarily staffed "a little higher." The bank hired 2,000 workers at the start of the pandemic to fill in for employees who were at high risk for contracting the coronavirus, and shifted more than 3,000 employees to new roles in its consumer and small-business divisions.
"We'll keep letting attrition be our friend, as we say, and we'll keep working the headcount into what we need," Moynihan said.
Moynihan also took the opportunity to tout his bank's progress on diversity, saying the Charlotte, North Carolina-based lender has "dramatically" increased representation of female, Black and Hispanic employees in management positions in the last few years.
"We have more work to do in some areas," he said. "There's plenty of talent in the company, and plenty of talent outside, and we acquire it all the time."
The talent-level messaging may be a direct reference to comments that landed Wells Fargo CEO Charlie Scharf in hot water last week — namely, that "a very limited pool of Black talent" is hindering the bank as it aims to double Black presence in leadership roles by 2025. Scharf has apologized, but a number of financial institutions — such as Citi, Truist, Square and Ally followed the dust-up by detailing their own initiatives to fight racial inequality.
- Goldman Sachs is planning to cut 400 jobs — roughly 1% of its workforce, Bloomberg and CNN reported Wednesday. "At the outbreak of the pandemic, the firm announced that it would suspend any job reductions," said Pat Scanlan, a spokesman for the bank. "The firm has made a decision to move forward with a modest number of layoffs."
JPMorgan Chase also began a round of hundreds of job cuts, including about 80 positions in consumer banking and dozens more in other units, Bloomberg reported Wednesday, citing anonymous sources.
- The banks join Wells Fargo and Citi in resuming job cuts that were largely put on hold in the industry amid the coronavirus pandemic.
Banks with long-running headcount reductions, such as HSBC, which is looking to cut 35,000 workers by 2022, and Deutsche Bank, which plans to shed just over half that number in the same time frame, resumed their layoff plans in May and June.
Right-sizing in the U.S. took a bit longer, with Wells Fargo resuming cuts in August — weeks after reports surfaced that the San Francisco-based lender would cut tens of thousands of jobs en route to CEO Charlie Scharf's goal of saving $10 billion in annual costs. Citi followed last month with a plan to cut less than 1% of its global workforce, an effort that should top out around 2,000 jobs.
Rumors that Goldman's toll would be heavier than usual surfaced in July, when the bank announced it was revamping its performance review system. At employees' annual December check-ins, 25% of staff will be deemed "exceeds expectations"; 65% will be given "fully meets expectations"; and 10% will receive "partially meets expectations," according to an internal memo seen by Reuters.
The bank typically cuts 5% of its staff yearly, often for missing performance targets. But it previously had not indicated what percentage of its workforce was assigned each grouping — triggering speculation that perhaps twice as many employees at the bank could face the ax.
Goldman's headcount was up 10% from a year ago, as of June 30, Reuters reported. In addition to streamlining operations, deeper job cuts could help the bank make room for more diverse staff — a goal it laid out in response to increased focus on racial representation and equality brought on in the wake of the May killing of George Floyd.
Many of the cuts in Goldman's current round are back-office roles that were reorganized in January, a source told Bloomberg. The bank reshuffled several leadership positions this week in connection with that reorganization.
The reductions at JPMorgan are part of a review of resources the firm conducts each year, a spokeswoman told Bloomberg. The bank was one of few that declined to comment or commit in March to a pandemic-influenced pause on job cuts.