Surging Trading Profits Can't Stop the "Downsizing Trend"! America's Major Banks See Fastest Layoff Pace in Six Years as AI Becomes a Key Driver

According to Zhitong Finance APP, although major U.S. banks have just delivered a stellar quarterly performance driven by a trading boom, this has not slowed their pace of layoffs. In the second quarter, these banks recorded the largest quarterly drop in headcount in at least six years. According to employee data disclosed in quarterly reports, Bank of America (BAC.US), Wells Fargo (WFC.US), Citigroup (C.US), Goldman Sachs (GS.US), and Morgan Stanley (MS.US) collectively cut more than 10,000 employees in the second quarter. This marks the largest quarterly decline since early 2020 based on available data. Among the major U.S. banks, only JPMorgan Chase (JPM.US) saw a slight increase in staff compared to the end of the first quarter.

Since the start of this year, Wall Street banks have been accelerating layoffs, with overall headcount at major banks declining for three consecutive quarters. Many banks are striving to control costs. For example, Citigroup has continued to streamline its workforce in recent months, as CEO Jane Fraser works to enhance the bank's shareholder returns. Bank of America CFO Alastair Borthwick said in an earnings call with analysts earlier this week, "For the past six quarters, we've done an excellent job of managing our headcount." The bank’s total staff is down nearly 1% from the same period last year.

The six largest U.S. banks are continuing to cut employee numbers

Meanwhile, the development of artificial intelligence (AI) has further intensified market concerns about the long-term employment prospects for staff. Standard Chartered Group CEO Bill Winters stated earlier this year that the company would cut certain positions to "replace lower-value human capital with the financial and investment capital we deploy." However, he later apologized publicly for this statement.

Wells Fargo CFO Michael Santomassimo said on Tuesday's earnings call, "We expect that the company can be run with fewer employees in the future than it does today." He added, "Technology, especially artificial intelligence, really helps us achieve this in different ways, or faster than in the past. But we do expect to continue to see further improvements in efficiency going forward."