JPMorgan traded lower today after it announced plans to reduce its workforce by roughly 19,000 jobs by FY2014.
The company in a presentation to investors Tuesday said it plans to axe roughly 13,000-14,000 jobs in its mortgage segment department and an additional 3,000-4,000 in community banking, Street Insider notes.
“Community banking cuts exclude home lending. Headcount will be reduced by 4,000 this year,” the report adds.
Job cuts have become a familiar story in the banking industry. Banks are navigating new government regulations that have crimped some old sources of revenue. The banks have also said that complying with the new regulations is costing them more money.
Bank of America, Citigroup, Morgan Stanley and Goldman Sachs all trimmed jobs in 2012. Morgan Stanley’s current round of job cuts has focused on senior ranks and investment bankers. Bank of America has said it needs fewer people to work through problem mortgages, though it has cut jobs in other areas. Citigroup is scaling back in countries that it no longer sees as growth engines.
Meanwhile, JPMorgan, which shed about 1,200 jobs in 2012, said it hopes to find jobs within the bank for displaced workers through a “redeployment” program.
The move could signal a new direction for staffing.
“JPMorgan is speculating that increased competition in the mortgage industry coupled with continued low rates will hit margins, stemming the potential for growth,” Street Insider notes.
Oh, good: Banks are preparing to fight for control over the mortgage industry? What could possibly go wrong?
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The Associated Press contributed to this report.