14 DAY TRIAL // JPMorgan Chase has announced plans to cut over 17,000 jobs over the next two years, which translates to approximately 7 percent of its workforce.
Financial Times details that the bank currently employs about 259,000 people. Chief executive Jamie Dimon has revealed the strategy during the bank's annual shareholder meeting on Tuesday.
Employees in charge of mortgage processing are primarily targeted by the company's decision. The mortgage sector alone is set to suffer a reduction of 13,000-15,000 jobs.
However, redundancies in hiring have been pinpointed in the asset management, private banking and commercial banking departments.
Part of JPMorgan's losses last year have been incurred due to a single trader, known as “the London whale.”
Bruno Iksil, also nicknamed Voldemort or The Caveman, is known for aggressive, bullish techniques that have lost the company up to $9 billion (€6.9 billion), according to Wikipedia.
In 2011, he made a splash by making a $450 million (€345 million) profit from a $1 billion (€765 million) investment based on other companies defaulting.
“Yes, it was a little bit too much change in one year: some of it was ‘the whale’, some was the [reorganization]. That’s life,” Dimon states.
He adds that he is confident that JP Morgan will turn up a net income of more than the projected $22 billion (€16.8 billion) this year, even with tougher regulations.
“Let’s not throw out the baby with the bathwater. [...] But whatever changes are made, JPMorgan is in a position to compete with whoever’s in the ring,” he explains.
New CFO Marianne Lake predicts a profit of $27.5 billion (€21 billion), which is set to come from cutting jobs, ending lawsuits over mortgage issues and raising interest rates.
Speaking of stricter regulations and the economic downturn, she describes the situation as “expensive for us, but prohibitive for others.”
Dimon adds that the bank is not awarded large subsidies and does not count on a government bailout.
“We pay market prices when we borrow money,” he stresses.