JPMorgan to cut 8,000 jobs this year
JPMorgan Chase plans to eliminate a total of 8,000 jobs this year as its mortgage business shrinks and as the giant bank aims to control costs at its branches.
About half of those job cuts had already been announced. JPMorgan Chase now plans to cut more jobs as it tries to reduce $2 billion in consumer banking expenses by the end of 2016.
The new job cuts announced Tuesday include reductions in the bank's mortgage and retail banking businesses. The bank also cut 16,500 jobs last year in those areas.
The 8,000 job cuts this year are equivalent to about 3 percent of JPMorgan's total workforce of 251,000. JPMorgan Chase & Co. also says it will add about 3,000 jobs in other areas this year.
For years, low interest rates caused a boom in mortgage refinancing. But interest rates began rising midway through last year, and now fewer Americans are refinancing. JPMorgan and other big banks reported double-digit declines in their mortgage business at the end of last year.
"We're seeing much lower volumes as we're going through the first quarter of 2014," said Gordon Smith, who runs the company's consumer and community banking business. The company said its mortgage business will lose money this year.
JPMorgan Chase is also aiming to keep a lid on costs in its branches. The number of branches will be about flat this year and next, Smith said. The bank also plans to reduce the size of its branches as customers increasingly bank online or use ATMs.
The shift toward ATMs has been under way for decades, but mobile banking including the ability to make deposits by snapping photos of checks means some customers never even leave their house. Almost 10 percent of deposits are now made through mobile phones, said Barry Sommers, head of Chase's consumer banks.
"As transactions move to mobile devices and Chase.com ... you will see a reduction" in tellers and other service staff, Sommers said.
Sommers emphasized that branches are still important. He noted that almost three quarters of Chase's customers visit a branch every three months. Branches are moving from being a place for deposits and withdrawals to being a place to get advice, open an account or talk to a loan officer, he said.
That shift is good for the bank's bottom line. Electronic deposits cost about 3 cents to process, compared to 65 cents if done through a bank teller, the company said.
Some of the job cuts are coming behind the scenes as JPMorgan automates back-office tasks that are currently done by hand.
JPMorgan's stock edged down 40 cents to $57.63 in morning trading. The stock is near its 52-week high of $59.82.