The days of job security on Wall Street were short-lived.
Public pledges that employees’ jobs were safe — along with reduced attrition in the pandemic and continued hiring of new college graduates — brought the sharpest surge in the headcount of the six biggest U.S. banks in a decade.
The firms added almost 20,000 workers in the first nine months of the year.But as the pandemic drags on, the two newest CEOs at the big six — Goldman’s David Solomon and Wells Fargo & Co.’s Charlie Scharf — have turned their attention back to cost-cutting plans.
Another, Citigroup Inc.’s Jane Fraser, takes the reins in February with a mandate to make that bank more efficient.
There are also doubts that 2021 will continue the flood of trading activity that has delivered the best year in a decade to banks’ Wall Street units.
“We will have fewer people working on Wall Street at the end of next year,” said Michael Nelson, a managing director at executive-search firm Quest Group. “Despite all their profitability from investment banking this year, they are super concerned about next year.”
Executives are also starting to feel the pressure from investors who’ve shown little faith in their shares.
Among the six firms, only Morgan Stanley has climbed in 2020, and the four biggest banks have all fallen more than 16% in a year when the S&P 500 Index is up 11%.
The six banks, which employ more than 1 million people worldwide, have reduced their collective headcount by more than 140,000 over the past eight years through job cuts, unit sales and forgoing replacements for workers who leave.