With refinancing demand at low levels, JPMorgan Chase (JPM) announced it would cut some 8,000 jobs in its consumer and mortgage banking units.
The United States’ largest bank said it expects revenue challenges due to the falling interest in refinancing — a significant part of a bank’s financial portfolio.
JPMorgan said last year it would cut 2,000 jobs, thus along with other jobs cuts this announcement would bring that total to more than 24,000 since the beginning of 2013.
The new cuts are expected to come by the end of this year.
Competitors including Wells Fargo & Co. and Bank of America Corp. have been dismissing people as higher interest rates discourage the refinancings that banks relied on to fuel profits. JPMorgan employed 251,196 at the end of 2013, a decrease of 7,557 from the previous year, the company said in its quarterly earnings statement.
Banks are moving in the direction of downsizing staff due to mortgage issues but also because of the ease of the growing online services. Withdrawals and deposits are now simple to do at ATMs. And more consumers are paying bills online, and applying for mortgages.
Banks see a way to keep profit margins up by eliminating people in their service sectors.
