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JPMorgan is not very aggressive about reducing its workforce. CEO Jamie Dimon has said the bank tends not to stop growing even in recessions, but in the third quarter it appears the company has decided to do so.
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JPMorgan’s fourth-quarter results released today revealed that headcount at its corporate and investment bank (CIB) fell by nearly 500 people in the three months to December. The accompanying notes say nothing about this.
The job cuts coincided with a 24% year-over-year decline in CIB’s net income in the fourth quarter, even as many of the investment bank’s business areas recorded increased revenue. Bankers in the equity capital markets, especially, saw their revenue increase 30% year-on-year this quarter.
CIB’s profit decline appears to be due to a significant (9%) increase in compensation expenses in the fourth quarter compared to 2022. However, this is not necessarily due to an increase in bonuses: the increase in expenses, which JPMorgan said in a presentation accompanying the results, is the result of “the timing of earnings-related compensation,” which typically results in changes in vesting schedules. means.
JPMorgan’s fourth-quarter job cuts are unusual. In the fourth quarter of 2022, the investment bank’s headcount increased by 1,655 people.
JPMorgan’s equity capital markets bankers weren’t the only ones performing well in the fourth quarter. Debt capital market bankers and securitization specialists also performed well. Interest rate traders did not.
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