Dive Brief:
- JPMorgan Chase laid off hundreds of employees in its mortgage unit this week, including some managers, Bloomberg reported Wednesday, citing people familiar with the matter.
- The cuts come as the bank announced plans Wednesday to hire more than 500 small-business bankers over the next two years.
- “We regularly review our business and customer needs and adjust our staffing accordingly — creating new roles where we see the need or reducing positions when appropriate,” a JPMorgan spokesperson told Banking Dive in a statement Thursday.
Dive Insight:
JPMorgan’s home-lending cull comes after the bank reported a 46% drop in mortgage revenue year over year, according to its fourth-quarter earnings statement. The bank saw a 60% slump in mortgage origination volume in 2022, according to Bloomberg, as consumer demand for home lending dried up amid a series of interest rate increases.
This is hardly the first right-sizing JPMorgan has initiated in home lending. The bank cut hundreds of employees in the unit in June and reassigned hundreds more.
Other banks have done likewise. Wells Fargo’s home-lending footprint has seen several rounds of cuts since April. The bank last month unveiled plans to streamline its mortgage business to focus on existing customers and nonwhite communities.
Citi in September pushed “a small number of staffing reductions” on its mortgage team “due to internal streamlining of functions.”
USAA last week eliminated 130 mortgage-division jobs. And New York Community Bank announced last week it is closing 69% of Flagstar Bank’s retail home-lending offices and shifting to a branch-only model for that sector. NYCB acquired Flagstar in December.
The small-biz ramp-up
For his part, JPMorgan CEO Jamie Dimon has lent a business-as-usual tone to the prospect of staffing up in some sectors while downshifting in others. “We’re still opening branches, and in general around the world, we are still hiring bankers, consumer bankers, small-business bankers, middle-market bankers, folks overseas,” he told Reuters. “We have more clients to cover.”
A 500-person hiring push would deepen JPMorgan’s business-banking roster by 20%, the bank said.
The effort comes as the Small Business Administration saw a record number of applications over the past two years.
“Since the start of [the Biden-Harris administration], small business applications reached a high of 10.5 million, the most in any two years in our nation’s history,” SBA Director Isabella Casillas Guzman said in a statement last month.
JPMorgan is counting on small firms needing financial advice as well as deposit, credit and cash management products to help them weather upcoming economic hurdles.
“Small business owners are facing difficult challenges with persistent inflation, supply chain disruptions, and expense pressure,” Ben Walter, CEO of business banking at Chase, said in a statement. “We know that banks play a critical role in the long-term success of small businesses and their communities. This investment in our workforce is a testament to our commitment to our clients and our intent to support them through the business cycle.”
