In a cost-cutting move, Raymond James is eliminating nearly 4% of its global workforce, which now stands at 13,900 worldwide — meaning about 500 positions.
Most of the job cuts affect those in corporate roles across the U.S. and abroad.
“Given the strong infrastructure we have in place, these steps are not expected to diminish service levels to advisors or their clients, or impair our ability to continue our growth momentum,” said Chairman and CEO Paul Reilly in a memo sent to the firm’s employees and obtained by ThinkAdvisor late Tuesday.
Those losing their employment will get a full bonus for the current fiscal year ending Sept. 30 and severance pay of up to a year of total compensation for the “more tenured associates,” Reilly explained. Staff being let go also will get 12 months of paid medical benefits and professional job placement support.
The number of staff at Raymond James’ headquarters and in the Tampa, Florida, region should remain at about 5,000, roughly the 2019 level.
More Remarks From Reilly
“Among the most difficult choices I have made [this year] … is the decision that was shared with affected associates this morning — that we are eliminating their jobs as part of overall cost controls.”
Other firms in the industry have made similar moves.
Wells Fargo, for instance, started job cuts in early August. They could impact tens of thousands of workers, according to a recent Bloomberg report.
Many banks have had to sharply increase their loan-loss provisions during the pandemic, and some also have turned to job cuts to boost their financial situation. Raymond James’ loan loss provisions were $81 million in the quarter ending June 30 and $109 million in the prior period.
Citigroup is set to resume job cuts this week, which should affect less than 1% of its global workforce, the bank told Bloomberg Monday.
“Heading into 2020, we were focused on improving efficiencies to prepare for potential market turbulence and recessionary environments,” Reilly said. “We were not anticipating a pandemic and the corresponding economic conditions and rate cuts that effectively wiped out half our earnings.”
The firm is not planning to make more job cuts. “While we plan to continue identifying efficiencies throughout our businesses, starting with a significant cut in pay for me and our senior leadership team, we do not intend to have another round of job eliminations,” the executive added.
“Longer term, we are undertaking a multi-year review to ensure we are efficient and fully realizing the scale that comes from meaningful investments in back-office modernization and technology. We will also continue to develop a forward-looking real estate strategy reflecting advances in remote work and changing client expectations,” he said.
Raymond James ended the most recent quarter with 8,155 independent and employee advisors as of June 30. That’s up 251, or about 3%, from a year ago, and seven advisors from the quarter ending March 31.
Across the company, total revenue dropped 5% from a year ago to $1.83 billion as of June 30. Its net income weakened 34% to $172 million, while earnings per share fell 32% to $1.23.
Raymond James will release earnings for the period ending Sept. 30 and its 2020 fiscal year on Oct. 28.
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