JPMorgan Chase to cut 17,000 jobs

Mortgage business will see major reductions.

New Statesman
Photograph: Getty Images.

JPMorgan Chase is planning to cut 17,000 jobs in its consumer and mortgage businesses by the end of 2015.

The largest US bank by assets will cut around 13,000 to 15,000 jobs in its mortgage business.

In the company’s annual shareholder meeting yesterday, CEO Jamie Dimon said that an improving housing market, with fewer employees processing mortgage defaults, and new technology would lead to lower headcount.

Rejecting the idea that the bank enjoys huge subsidies, Dimon said: “We pay market prices when we borrow money.”

Despite the cuts, Dimon said the bank will achieve a net income of about $22bn in 2013 and overcome headwinds from new regulations. “Let’s not throw out the baby with the bathwater,” he said of tougher regulation. “But whatever changes are made, JPMorgan is in a position to compete with whoever’s in the ring.”

Marianne Lake, CFO of JPMorgan, said the bank’s net income would rise to $27.5bn over time from $21.9bn in 2012 due to an expected 1 percentage point rise in interest rates, the end of mortgage crisis litigation, and job cuts.

Daniel Pinto, co-head of the investment bank, said that overall JPMorgan would benefit from its scale as the new capital regime was expensive for us, but prohibitive for others.

Michael Cavanagh, the other co-head, said it is hard to see how others in like businesses who lack the advantages we have can do better.

JPMorgan reduced its targets for return on equity at its corporate and investment bank to 16 per cent from about 18 per cent to retain more capital for meeting regulatory requirements.

Meanwhile, the bank will hire people in its asset management, private banking and commercial banking businesses.

The job cuts amount to 7 per cent of the bank’s workforce.