Royal Bank of Canada could cut more than 1,800 jobs next quarter, the bank said Thursday in its earnings report for the three months ending July 31.
Headcount at Canada’s largest bank fell 1% from last quarter, and the Toronto-based lender said it expects to reduce staffing by a further 1% to 2%. The bank counted 93,753 full-time employees as of July 31, according to Reuters — meaning a 2% cut would affect 1,875 workers.
RBC CEO Dave McKay said in May that the bank would slow its hiring. The bank attributed much of its downsizing last quarter to attrition and said that would likely continue.
“We will continue to monitor the changing landscape and are ready to accelerate further tactical actions as deemed appropriate,” McKay said Thursday during an earnings call, according to The Globe and Mail.
Salaries jumped 17% during the quarter, compared with the May-to-July span last year, due to aggressive hiring and rising inflation, the bank said. Bonuses and other incentives added 4% to overall expenses.
Revenue at the bank climbed 19% year over year. But expenses outpaced that — jumping 23%.
The Bank of Canada, the nation’s federal banking regulator, has raised interest rates 10 times since March 2022 to stem inflation, a factor that has left a varied effect on RBC.
Higher interest rates on loans padded RBC’s profit margin. Net income at the bank’s personal and commercial banking unit spiked 5%. But RBC set aside C$616 million in provisions over the quarter to cover expected credit losses.
“We are operating in a structurally uncertain macro backdrop,” McKay said, according to The Globe and Mail, noting slower labor markets, slower wage growth, fewer job postings, and a bump in unemployment.
RBC wasn’t the only Canadian lender to announce earnings Thursday. The bank’s fiercest rival, TD, also posted its quarterly results — and saw profit at its Canadian personal and commercial banking segment dip 1%. Net income for its U.S retail unit, however, fell 9%, and the bank recognized its $225 million in charges related to its scuttled acquisition of First Horizon.