JPMorgan quietly cut 500 people from its investment bank before Christmas
JPMorgan isn't a big one for making job cuts. CEO Jamie Dimon has said he tends not to stop growing the bank during a recession, but in the third quarter, he seemed to bite the bullet.
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JPMorgan's fourth quarter results, released today, reveal that headcount in the corporate and investment bank (CIB) fell by nearly 500 people in the three months to December. Nothing is mentioned of this in the accompanying notes.
The cuts coincided with a 24% year-on-year decline in CIB net income in Q4, even though many business areas in the investment bank registered revenue gains. Equity capital markets bankers in particular 30% year-on-year rise in revenues earned the quarter.
The drop in profits at the CIB seems to have been precipitated by a big (9%) increase in fourth quarter compensation spending compared to 2022. This wasn't necessarily due to higher bonuses, however: in the presentation accompanying the results, JPMorgan says higher spending was the result of "the timing of revenue-related compensation," which usually implies a change in vesting schedules.
Cutting headcount in the fourth quarter is unusual at JPMorgan. In 2022, fourth quarter headcount in the investment bank rose by 1,655 people.
It wasn't just JPMorgan's equity capital markets bankers who did well in the fourth quarter. Debt capital markets bankers and securitization professionals did well too. Rates traders did not.
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