JPMorgan plans to cut 8,000 more jobs
JPMorgan Chase plans to eliminate 8,000 jobs this year as its mortgage business shrinks and the giant bank aims to control costs at its branches.
About half of those job cuts had already been announced. JPMorgan Chase now plans to cut more jobs — about 3 per cent of its workforce of 251,000 — as it tries to reduce $2 billion in consumer banking expenses by the end of 2016. But the bank said it would add about 3,000 jobs in other areas this year.
The new job cuts announced Tuesday are in its mortgage and retail banking businesses. The bank also cut 16,500 jobs last year in those areas.
JPMorgan's mortgage business, like that of other big banks, is declining as fewer Americans refinance their home loans. In the years following the recession, low interest rates caused a boom in mortgage refinancing. But interest rates began rising midway through 2013.
"We're seeing much lower volumes as we're going through the first quarter of 2014," said Gordon Smith, who runs the company's consumer and community banking business. The company said its mortgage business will lose money this year. Smith and other JPMorgan executives spoke at the company's investor day in New York, which was webcast.
In November his company agreed to pay $13 billion to settle a civil inquiry into its sales of low-quality mortgage-backed securities that collapsed in value. It also announced a $4.5 billion settlement with 21 major institutional investors over mortgage-backed securities issued by it and Bear Stearns between 2005 and 2008. JPMorgan acquired Bear Stearns in 2008.
"It's been the most painful business ever," said Jamie Dimon, the company's chairman and CEO. He added that it would be reasonable for investors to ask why they're in the mortgage business at all. But mortgages are critical for most Americans and they're an important product for the bank, he said.
"If I had a choice, I would never be in default servicing again," he said. "I would tell anyone who's got a mortgage with us, 'You're 60 days late, we're selling the mortgage, and we don't want to do any business with you anymore.' It's just far too painful."
Comments on this story are pre-moderated. Before they appear, comments are reviewed by moderators to ensure they meet our submission guidelines. Keep it clean, keep it civil, keep it truthful, stay on topic and be responsible. Comments are open and welcome for three days after the story is published. We reserve the right to close comments before then. Comments that appear on the site are not the opinion of Castanet, but only of the comment writer.
Read more Business News
- The path to mortgage freedomGuest Column - 5:00 am
- Lost snowmobiler was full of lifeVernon / N. Okanagan
- Buskers festival remains on radarKelowna
- Harvesting rain water in the OkanaganPenticton / S. Okanagan
|QHR Technologies Inc||1.19||+0.01|
|Anavex Life Sciences||0.54||+0.12|
|Copper Mountain Mining||2.14||-0.06|
|Sunrise Resources Ltd||0.03||-0.005|
|Mission Ready Services||0.275||-0.02|
How will you pay for this today? Maybe it’s time to change the way you answer this common checkout question.With more payment options than ever, consumers can find easy ways to save money, simpl...
In the razzle dazzle of Hollywood it is hard to find anyone who stands out from the crowd. The fraternity of Actors, Producers, Directors and various other technical guru’s seem to live in a wo...
This past Sunday I drove from Kelowna to Powell River. For those of you who’ve never had to, particularly in winter, it means rising in the wee hours; managing a treacherous journey on the Coqui...