JPMorgan mortgage, community units to lose up to 19,000 jobs
- Article by: DAWN KOPECKI
- Bloomberg News
- February 26, 2013 - 8:41 PM
JPMorgan Chase & Co., the biggest U.S. bank, will eliminate as many as 19,000 jobs in mortgages and community banking through 2014 as Chief Executive Jamie Dimon trims expenses.
The lender, employing about 259,000 people at the end of December, will cut 13,000 to 15,000 jobs in its mortgage unit and 3,000 to 4,000 in community banking excluding home lending through the end of next year, the company said Tuesday in presentations on its website. Firmwide head count will shrink by about 4,000 people this year, mainly through attrition, while some employees are redeployed to other areas, said Kristin Lemkau, a spokeswoman.
Dimon, 56, is focusing on expense reductions after boosting net income to records for three straight years. Mortgage profits that drove banks’ earnings may fade this year as increased competition keeps the rates on new loans near all-time lows. Some firms also are cutting jobs after a settlement with U.S. regulators resolved obligations to review foreclosure documents.
With credit quality stabilizing, “banks can focus on operational efficiency,” said Chris Kotowski, a New York-based bank analyst with Oppenheimer & Co. “When credit problems are mounting, banks have to throw money at their problems. When the environment stabilizes, they can worry about operating efficiency.”
JPMorgan gave the forecasts as top executives began their annual Investor Day conference at the firm’s New York headquarters. The potential job cuts for mortgage and community banking amount to about 7.3 percent of the lender’s total head count as of Dec. 31. The bank may also add people in other businesses, offsetting companywide reductions, Lemkau said.
Investment-banking compensation is “expected to remain relatively consistent,” the bank said.
JPMorgan shares fell 0.2 percent to close at $47.60. The company rallied 8.5 percent this year through Monday.
© 2013 Star Tribune