×
Newsmax TV & Webwww.newsmax.comFREE - In Google Play
VIEW
×
Newsmax TV & Webwww.newsmax.comFREE - On the App Store
VIEW
Tags: wall street layoffs | covid-19 stimulus | capital markets | equity declines

Wall Street Layoffs Loom

Wall Street Layoffs Loom
Jamie Dimon, Chairman and CEO of JPMorgan Chase & Co., speaks at the Economic Club of Washington in Washington, D.C. Dimon recently warned of an "economic hurricane" heading for the U.S. (Getty Images / 2016 file photo)

By    |   Monday, 27 June 2022 12:19 PM EDT

Last week, news leaked that JPMorgan Chase is laying off or reassigning 1,000 people in its mortgage division.

It’s a simple matter of what comes up, must come down. With capital markets revenue plunging, more job cuts are inevitable, Wall Street insiders tell CNBC.

In the past two years, COVID stimulus spending caused a hiring binge at major U.S. investment banks, whose ranks swelled, from analysts to richly paid rainmakers. Morgan Stanley, Goldman Sachs and JPMorgan, expanded their head count in the past two years by 26%, 17% and 13%, respectively.

The boom was continuing up until as recently as six months ago. Now that the stock and bond markets are plummeting, capital markets, initial public offerings (IPOs) and mergers and acquisitions (M&As) have all dried up, as well.

“When banks have a revenue problem, they’re left with one way to respond: Ripping out costs,” says one Wall Street head hunter.

“I can’t see a situation where banks don’t do RIFs [reductions in force] in the second half of the year,” David McCormick, CEO of DMC Partners recruitment firm says, of the pending bust.

IPOs are down a staggering 91% this year, according to Dealogic data. This has caused equity and debt capital market revenues to dive by 71%.

JPMorgan Chase President David Pinto says the bank will report a 45% decline in the bank's fees in the second quarter, describing the overall situation for the investment banking industry as a “very, very challenging environment.”

Thus far, JPMorgan Chase has been the only major Wall Street firm where layoff news has leaked. Insiders say it is only a matter of time before other, major slashes occur.

“Business has dropped off,” one financial industry insider says. “I wouldn’t be surprised if there was some type of headcount reduction exercise in the October-November time frame.”

Reports are also surfacing that major banks that tolerated or even encouraged employees to work from home during the COVID-19 lockdowns are returning to their strict work ethos.

As McCormack puts it: “Banks have been very clear about trying to get people back to work. If you aren’t stellar and you are continuing to work from home, you are definitely most at risk.”

 

© 2022 Newsmax Finance. All rights reserved.


StreetTalk
Last week, news leaked that JPMorgan Chase is laying off or reassigning 1,000 people in its mortgage division. It's a simple matter of what comes up, must come down.
wall street layoffs, covid-19 stimulus, capital markets, equity declines
367
2022-19-27
Monday, 27 June 2022 12:19 PM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
 
Get Newsmax Text Alerts
TOP

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved
NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved