Raymond James is trimming close to 4% of its workforce of 13,900 employees in and outside the U.S. — or roughly 500 positions.
But will the firm, which has over 8,100 advisors and added a net 251 in the past year, see any impact from the move on its recruiting efforts — including the transition packages it offers?
“It’s part of an overall industry trend,” said Mark Elzweig, an executive search consultant based in New York, about the job cuts.
Raymond James’ announcement Tuesday about layoffs followed similar news from Wells Fargo and Citigroup, which had paused layoffs earlier this year due to pandemic and recently resumed them.
Worldwide, some 64,000 positions have been eliminated at banks so far this year, according to Bloomberg, which estimates that close to 80,000 layoffs could happen in 2020. The vast majority of the cuts to date this year, about 50,000, are in Europe.
“The pandemic hammered firm profitability. Layoffs are for staff positions,” Elzweig explained.
In Raymond James’ case, most of the job cuts affect those in corporate roles across the U.S. and abroad, according to the firm.
“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.
For Elzweig, “So far there has been no effect on recruiting” from banks’ job cuts, “but that doesn’t mean that there won’t be one.”
The number of staffers at Raymond James’ headquarters and in the Tampa, Florida, region should remain at about 5,000, roughly the 2019 level, the firm said Tuesday.
It also is not expecting 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,” Reilly said.
Still, financial institutions are in a tough situation due to their need to set aside money to cover loan losses as a result of the economic downturn. Raymond James’ loan loss provisions, for instance, were $81 million in the quarter ending June 30 and $109 million in the prior period.