A new report from Zacks Equity Research]www.zacks.com/ZER/ provides an in-depth examination of imminent layoffs for [Wells Fargo & Company, Bank of America, Citigroup]www.citigroup.com/, [Bank of New York Mellon]www.bnymellon.com/, and [State Street.]www.statestreet.com/ Via the company's Analyst Blog, [Zacks.com evaluated the planned personnel reductions and the potential long-term effects of staff cuts from the major financial institutions.
According to Zacks, Wells Fargo is moving forward with Project Compass, the entity's cost-efficiency initiative which began in 2010. Aiming for an enormous $1.5 billion improvement in spending, Wells Fargo is looking to retrench or eliminate employees in technology, operations, card services, loan operations, and communications.
Wells Fargo will attempt to bring its quarterly expenses down to $11 billion by the fourth-quarter of 2012, off of an estimated $11.7 billion recorded during the third-quarter of this year. In addition to cutting workers, Wells Fargo is also targeting measures for loss alleviation and foreclosure assets to promote a decline in internal costs.
Most recently, Wells Fargo announced plans to lay off around 25 staffers and remove 30 unfilled positions, with the general goal of reducing expenses for technology by $188 million. Earlier in the year, the financial company made major cuts in Sioux Falls, South Dakota, and during the spring and summer, Wells Fargo also laid off workers in its mortgage divisions in San Antonio, Addison, and Bedford, Texas, as well as Des Moines, Iowa.
However, Wells Fargo isn't alone in trimming its base of employees, with Citigroup revealing last week that it will layoff around 3,000 of its staff for cost containment, including 900 jobs from within the securities and banking divisions. Citigroup's move follows BofA's September announcement that the financial institution would retrench over 40,000 workers during the first phase of its restructuring program.
Bank of New York will join the other banks in personnel reductions, stating in August that the company would slash around 1,500 jobs, totaling 3 percent of its workforce. Meanwhile, State Street will drop 850 technology positions via layoffs and outsourcing.
Nearly every financial entity planning to eliminate workers cited poor cost-to-income ratios, a slowdown in market activity, weak trading volumes, strident regulations, and the recovering economy as the chief reasons for their cutbacks. In a company statement, Zacks commented that it will keep a close eye on the weaker firms who haven't yet released their plans for cost-effective initiatives like layoffs.
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