J.P. Morgan Chase & Co. (NYSE: JPM) recently announced plans to layoff more than 5,000 of its employees by next year. This move contributes towards the company's aim to be a more efficient extension of their clients. According to those familiar with the plan, the bank has already cut at least 1,000 of those jobs, and the average J.P. Morgan Chase branch will lose one employee over the next two years.
Using Technology to Cut Costs
By cutting branches and 2% of their workforce, the company intends to move more toward Internet and mobile banking.
The multinational bank, which has 5,570 branches, has changed to emphasize technology and rely less on human tellers. But the layoffs will also effect the business's other three major units: corporate and investment banking, asset management and commercial banking.
Although officials have not discussed the announced layoffs in detail, they have previously hinted a motivation to cut their expenses - the company wants to drop expenses to about $57 billion in 2015 from $58.4 billion in 2014. Other efforts to cut expenses include relocating employees to less expensive office space and revising third-party contracts. Last Wednesday, the company's Chairman and Chief Executive James Dimon said “It’s cheaper for us and good for clients.” According to Mr. Dimon,"If you're in a capitalist society, you better be figuring out ways to do things better, faster, cheaper for the client,"
This is a big move by the largest bank in the United States. Still, J.P. Morgan hires about 40,000 employees annually.