U.S. banks to “cut 10% of jobs in historical layoffs”
Wells Fargo analyst Mike Mayo is predicting the largest “reduction in U.S. bank headcount in history.” According to Mayo, U.S. banks are expected to cut 200,000 jobs or 10% of its employees in the next decade. The layoffs would be a direct consequence of rising competition from fintech and non-bank financial institutions and banks striving to improve productivity.
“This will be the biggest reduction in U.S. bank headcount in history.”
As reported in the Financial Times on Monday, Mayo warned that low-paying jobs are most vulnerable. For example, jobs as those in local branches and call-centers are at risk, with banks adapting to the new online realities following the coronavirus pandemic.
Accelerated digitisation
“Digitisation accelerated and that played to the strength of some fintech and other tech providers,” Mayo said.
As technology companies and non-bank lenders have increasingly gained market share in the payment and lending business over the past years, job cuts are inevitable, Mayo continued.
The analyst added:
“If I was giving advice to my kids, I’d say you probably don’t want to go into the financial industry.”
According to the analyst, banks will need to become more productive while staying relevant as he believes that technology and some customer facing roles will probably be the only ones that could see some growth or stabilization in what he called a “shrinking industry”.
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Source: igaming
