JPMorgan Chase & Co. (JPM), plans to reduce headcount by as much as 19,000 people in its mortgage and community banking businesses by the end of next year.
The company expects 4,000 job reductions this year, the New York-based lender said Tuesday in presentations on its website. Those reductions will occur almost entirely through attrition, said Kristin Lemkau, a spokeswoman for the lender. The mortgage business will shrink by 13,000 to 15,000 jobs through 2014, while community banking excluding mortgages loses 3,000 to 4,000 jobs during that period, the presentation shows.
Chief Executive Officer Jamie Dimon is seeking expense reductions after posting three straight years of record net income. Mortgage profits that have driven earnings at JPMorgan and Wells Fargo & Co. (WFC) may fade this year as increased competition keeps the rates banks offer on new loans near all- time lows. Financial firms are also cutting jobs after reaching a settlement with U.S. regulators that resolves the companies' obligations to review foreclosure documents.
Expenses are "an important focus area for us," JPMorgan said in one presentation. Investment banking compensation is "expected to remain relatively consistent."
Costs in mortgage banking will fall by about $3 billion through 2014, the company said. It expects a 20% reduction in same-store staffing by 2015 via attrition, while expanding the business.
JPMorgan gave the forecasts before top executives began their annual Investor Day conference in New York. The potential job cuts for mortgage and community banking would amount to about 7.3% of the firm's total 259,000 employees as of Dec. 31.
