In the economic desolation of 2020, the financial industry has provided a stable oasis for the majority of practitioners for most of the time. Now, the oasis is beginning to shrink.
Since Wells Fargo broke the promise of its American counterparts to resolutely refrain from mass layoffs during the epidemic, more and more US financial institutions have also begun to lay off workers in the past few months. Recruitment activity has dropped significantly from a year ago. And, since neither of these two trends shows any signs of abating, many bankers who have lost their jobs will find it difficult to get back to work.
“There are too many people in the financial services and banking industries,” said Alan Johnson, head of compensation consulting firm Johnson Associates Inc. He predicted that by the middle of 2021, the number of employees in this industry will decrease by 10% from the beginning of the epidemic. “There will be very few hiring next year. There will be some layoffs.”
At the beginning of the epidemic in the United States, despite large-scale layoffs in industries such as tourism, catering, retail, and energy, the financial industry provided temporary guarantees for practitioners. At that time, banks made a lot of fees by arranging emergency loans for companies, and the surge in trading and stock bond issuance also benefited their Wall Street counters.
However, there has never been a lack of suspicion that banks will resume the cost war, especially after months of high unemployment, they face billions of dollars in non-performing loans. Many banks are already thinking about layoffs. The general election last week dispelled hope that Congress would pass a stimulus plan to bail out banks. Even though Monday’s hopes about vaccines have helped banks reduce their stock losses in 2020, they are unlikely to prompt them to change directions in the short term.
Lose job
Although layoffs will involve various departments, the focus will be on traditional banking services (Because the customer has learned to do it online instead of going to the sales department) and back-office departments(Functions can be automated). Consolidation of business lines facing huge cost pressures (E.g. asset management and discount broker) also brought job cuts. If market activity and revenue levels can be maintained, the number of layoffs on Wall Street may be less.
In recent weeks, Wells Fargo has laid off more than 700 commercial banking positions and dozens of fixed income research analysts. JPMorgan Chase started laying off hundreds of employees, including about 80 jobs in the consumer department. Goldman Sachs Group began to abolish about 400 positions, including back-office positions that have been assigned to a larger profitable department.
However, as the largest employer among its American counterparts, Wells Fargo is expected to go further in the next few years and eventually cut tens of thousands of people. The bank said that as part of the cost reduction action, it will continue to reduce the number of branches.
A Wells Fargo bank teller said that she woke up every morning and worried whether this was her last day in Wells Fargo. A manager told her that she would be laid off, but when their bank branch closed, she was assigned to another place temporarily, leaving her in a dilemma. She described this situation as both frustrating and depressing: she has been searching for internal job notice, looking for other jobs, but not nearby. A colleague looking for outside opportunities told her that there was nothing outside.
Wells Fargo spokesman Vickee Adams said the bank’s extensive cost-cutting efforts included closing some branches, especially in densely populated areas.
“In this case, in order to ensure that we continue to provide good service to our customers, we will try our best to let employees work in other nearby branch,” Adams said. We try our best to be considerate of our employees and do our best to provide job search resources and other assistance.
No job
Tom Szmanda, president of the Symicor Group, a community bank personnel services company, said that unemployed people at large banks may find it difficult to find a job at a small bank.
He said that employees of large banks often specialize in certain areas of business, while small banks hope that job seekers have more diverse experience in community banking. Vacancies are also limited, because most banks do not want to increase staff.
He said that it is especially difficult for people in senior positions, whose time to find a new job has approximately doubled compared to before the epidemic. Moreover, even if you get a job, the salary is often not as good as before.
Szmanda said that he recommends job applicants from major banks to seriously consider their salary requirements sincerely.
According to data from the employment website Indeed.com, job vacancies in the banking and financial industries have decreased significantly. Job posting trend data shows that recruitment activities in late October fell by 21% compared with the same period last year, which was much higher than the 14% drop in the overall labor market.
Bright spot
The mortgage business is an exception. Banks are increasing their staff to meet the surge in demand for home purchases and refinancing. Jeramy Kaiman, head of professional recruitment at the human resources company Adecco Group in the western United States, said that in order to recruit enough people, banks are more willing to hire remote workers and train entry-level employees.
The mortgage business is hot-I don’t even know what other words to describe the condition, Kaiman said. Job seekers can often receive 3 to 5 positions within 24 hours after entering the market.
For job seekers, the silver lining now is that the unemployment rate in the financial industry last month was only 3.1%, which is much better than other industries that have been hit harder by the epidemic. For example, according to the Bureau of Labor Statistics, the unemployment rate in the hotel and food service industries is 15.9%. Therefore, the competition for job vacancies is not very fierce now.
The Texas bank Frost Bank, which is expanding its branch network in Houston, has received relatively stable applications. Branch President David LePori said that only applications for commercial loan positions have increased by 10%-15%. At Ally Financial Inc., executive director Nicole Fitz, responsible for talent management, said that in the second quarter, each vacant position usually received 27-30 applications, up from 24 at the beginning of the year, but it has not increased since then.
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