What Wall Street bosses from Goldman Sachs to JPMorgan are saying about the jobs outlook for 2024 in
- Citi kicked off 2024 by warning of 20,000 layoffs.
- JPMorgan, by contrast, expects compensation expenses to grow.
- Here's what 4Q earnings are telling us about the jobs landscape across Wall Street.
Earnings season isn't just for stock investors. It's also a great way to assess where the job market is going for people who work in the highly competitive financial services industry.
Are investment banks, private equity firms, and asset managers predicting more layoffs? Or are they gearing up for another talent war? And if so, where? Last year, banks opened 2023 by forecasting layoffs, including for the investment bankers who suddenly had nothing to do following the pandemic-era M&A and IPO boom.
This year, it's starting to look like a mixed bag, with some firms predicting rising compensation costs and other firms taking last year's layoffs to a whole new level.
Citigroup kicked off 2024 ominously, warning that it will lay off as many as 20,000 employees by 2026. But the bank is also going through a restructuring under CEO Jane Fraser and is not necessarily representative of the rest of the industry. JPMorgan, for example, reported that in 2023 it increased compensation spending by 12%, and the bank's CFO Jeremy Barnum said on the call that hiring would continue for bankers, wealth management advisors, and front office employees for new branches.
So what does 2024 hiring look like across Wall Street, an industry that employs a wide swath of professionals from bank tellers to software engineers and M&A advisors? Using the latest earnings material, including conference call transcripts, Business Insider has compiled a look at the Wall Street job market for 2024, from big banks like JPMorgan and Citi to asset managers like BlackRock and private equity firms like Blackstone. Here is what they have said so far.
This story will be updated as Q4 earnings roll out.
JPMorgan Chase
JPMorgan Chase is one of the few banks that has been bulking up — a trend that's expected to continue in 2024.
JPMorgan's headcount now stands at 309,926, up about 6% from 293,723 in 2022. Compensation expenses rose to $46.5 billion, 12% from the year prior. Its CFO, Jeremy Barnum, said in the Friday earnings call that expenses grew by 10% to $87.2 billion last year, "largely driven by compensation, including an increase in employees primarily in bankers, advisers, and technology and wage inflation as well as continued investments in marketing and technology," per transcript of the call provided by AlphaSense.
The bank expects 2024 expenses to increase further to total $90 billion, up $2.8 billion from 2023, and much of that will be focused on hiring.
CFO Barnum on Friday said the bank is gearing up for a "rebound in the investment banking wallet." Within consumer and community banking, he said, "one key driver is the branch strategy and the associated staff for that. In 2023, we built 166 new branches, and we're planning about a similar number this year."
Within asset and wealth management, "continued client adviser hiring is a key driver as well as making sure that both the advisers and all of their new clients have the support that they need."
Growth in corporate and investment banking for 2024 will be a "pretty consistent theme to the ones that we had before, including hiring bankers, both domestically and internationally."
Citigroup
Citi has been undergoing a major organizational shakeup under CEO Jane Fraser aimed at streamlining its complicated organizational structure, which includes similar job titles here and abroad. The bank ended 2023 with a headcount of 239,000, down from 240,000 as of the end of 2022 — and plans to cut 20,000 more jobs over the next two years. The news came as Citigroup reported a $1.8 billion loss in the fourth quarter.
In the Friday earnings call, Fraser said "2024 will be a turning point" for the bank. In the analyst Q&A portion of the call, Fraser was asked how to keep employee morale up given the layoffs.
"We do have areas that are growing," she said. "We are mindful that there is a human impact to the decisions we are making."
Goldman Sachs
Goldman Sachs has also been shrinking staff amid an M&A and IPO drought — although executives on Tuesday said they are seeing signs that business will pick up in 2024, which could lead to higher pay.
"We are already seeing signs of potential resurgence in strategic activity, which is reflected in our backlog," CEO David Solomon said on the company's fourth-quarter conference call with shareholders.
Looking ahead to 2024, CFO Denis Coleman said "the market for talent remains competitive," according to a transcript by AlphaSense. "We're staying true to our mantra of pay for performance. It's what our people expect, and it's one of the things that enables us to attract such exceptional talent and deliver excellence for our clients," Coleman added later.
As BI previously reported, Goldman's employees will start to learn exactly how competitive their pay will be starting today when the bank begins revealing 2023 bonuses.
In 2023, Goldman's compensation expenses rose about 2% to $15.5 billion over the previous year even as its workforce shrunk 7% to 45,300. Excluding severance-related costs of about $310 million," compensation was flat, Coleman said.
Last year, the bank explored ways to tighten up its headcount by seeking to cull those who were thought to be underperforming, according to media reports. Earlier in the year, it slashed more than 3,000 jobs in the first quarter alone.
The bank, like its peers, has faced the stiff headwinds of a slowed mergers and acquisitions environment. While Goldman said it remained Wall Street's dominant M&A shop, the firm reported investment-banking fees of $6.22 billion in 2023, 16% lower than the year prior. It blamed the drop-off on macro factors, namely "a significant decline in industry-wide completed mergers and acquisitions transactions."
Bank of America
Bank of America's headcount is down 1.8% from 216,823 employees in 2022 to 212,985 in 2023 (though headcount actually went up slightly from the third quarter to the fourth quarter).
BofA hired 15,000 people during the year even as headcount fell. CFO Alastair Borthwick said the company saved money by not backfilling roles when people left — the bank avoided "taking an outsized severance charge as we used attrition to lower our headcount along the way."
BofA execs also suggested there was more room for headcount to fall organically. As AI and technology initiatives reduce the need for some roles, they've been redeploying people internally — curbing the need for external hires — and will continue to do so.
"We still can manage headcount down just by not hiring people," CEO Brian Moynihan said. He added: "We hired 15,000 people this year, so we can always hire a little less if we see the efficiencies coming through and redeploy the people we have."
Wells Fargo
Wells Fargo ended 2023 with a headcount of 225,869, down 5% over 2022. Last year, the bank's CFO, Michael Santomassimo, warned that "very few parts of the company" would be spared the company's cost-cutting efforts.
The layoffs come as CEO Charlie Scharf seeks to remake the bank, including pulling back on its home lending and wealth management ambitions. It's been laying laying off mortgage staff since at least 2022. And the bank's advisors of ultra wealthy clients have also left in droves amid a restructuring that has consolidated offerings and gutted services, as BI has previously reported.
On Friday, the bank said headcount in home lending declined 36% last quarter, which Santomassimo said was the result of "market conditions as well as our new strategy."
Santomassimo also warned of more layoffs to come, saying the bank recorded a severance expense of $1 billion last quarter tied to planned cutbacks.
"Most of the planned actions should result in lower headcount," Santomassimo said on the call.
BlackRock
BlackRock, the world's largest asset manager, announced plans to lay off about 3% of its staff days before announcing a major acquisition.
The cuts would impact about 600 employees from its global workforce of about 20,000.
"As we prepare for 2024 and this very exciting but distinctly different landscape, businesses across the firm have developed plans to reallocate resources," Fink and Kapito said in a memo on Tuesday that Business Insider reviewed.
The memo said it would continue to add people and build capabilities to "support key areas of growth."
On Friday, the firm announced its plans to buy Global Infrastructure Partners, a private equity firm with 400 employees.
BlackRock laid off some 500 employees, or about 3% of the workforce at the time, in January 2023. It laid off another 1% of staff last June.
Morgan Stanley
Morgan Stanley also reported higher compensation costs in 2023 despite layoffs.
This past summer, the bank laid off some 3,000 employees, resulting in $353 million in annual severance expenses. Headcount declined 3% to 80,006 from 82,427, while compensation expenses rose to $24.5 billion from $23 billion.
Morgan Stanley's CEO Ted Pick did not announce any hiring plans during the first earnings call of his tenure. "The view that I would have is that we really work to grow the organization and to do so organically and efficiently," he said.
When asked by an analyst about Morgan Stanley's ability to compete for wealth management talent, chief executive Sharon Yeshaya said the "recruiting pipeline is healthy" and that the bank was still gaining new wealth management clients from its previous acquisitions.
Blackstone
Blackstone is slated to report fourth-quarter and year-end earnings on Thursday, January 25.
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