The share price of JP Morgan fell yesterday (February 25th) after the US bank confirmed it is going to be cutting thousands of jobs.
It was revealed by the bank that 8,000 jobs in its mortgage and retail banking sections are going to be lost as cutbacks are being made in these parts of the business.
Over 16,500 bankers in those areas were let go by JP Morgan last year, meaning more than 25,000 jobs in total will have gone in these departments in the last two years.
Chief executive Jamie Dimon told reporters that the company has to continue to make cutbacks. He said: "You're always trimming the sails. That's business. Obviously headcount is coming down in some of the businesses. That is life."
Some 6,000 bankers are going to be laid off in JP Morgan's mortgage division, while another 2,000 positions are due to be cut in its retail division. The bank is currently going through a switch to more automated machines, which reduces the need to have as many staff.
A decline in mortgage refinancing because of rising interest rates has made life difficult for many of the major banks in the US and with the Federal Reserve starting to wind down its quantitative easing programme, this situation is likely to be exacerbated in the coming months.
Stocks in the bank slipped yesterday on the New York Stock Exchange on the back of the news 8,000 jobs are being cut in total, with the share price of JP Morgan sliding by 1.72 per cent. However, there was a slight rebound for the stock in after-hours trading, with a 0.28 per cent recovery recorded by the share price.
JP Morgan also revealed that it will be hiring 3,000 new bankers in the coming 12 months, which will bring the firm's total employment to around the 260,000 mark by the end of 2014.
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