FirstFT: Wall Street job cuts set to cross 11,000 this year

Job cuts at the largest US banks are on course to surpass 11,000 this year as Wall Street contends with the worst recruitment market since the financial crisis following a pandemic-era hiring binge.

Citigroup this week became the latest big US bank to announce significant job cuts, telling investors that it planned to complete 5,000 redundancies by the end of the second quarter, mostly in investment banking and trading. That followed cuts affecting thousands of bankers at Goldman Sachs and Morgan Stanley.

The job cuts come as executives try to unwind a recruitment spree that started as the economy rebounded in the aftermath of Covid-19. Banks dramatically increased their headcounts to cope with a deals and trading boom at a time when working from home was scrambling traditional ways of doing business.

At the end of the first quarter, the five large banks that dominate Wall Street — JPMorgan Chase, Bank of America, Morgan Stanley and Citi — collectively employed a record 882,000 globally, virtually unchanged compared with the end of 2022 and an increase of more than 100,000 versus the end of March 2020.

The only bank to report a significant staff reduction in the first three months of the year was Goldman, where headcount fell by 6.4 per cent to 45,400, the steepest drop in years. Morgan Stanley’s fell slightly to 82,266, while at Citi it was flat. JPMorgan has not announced large-scale reductions.

Here’s what else I’m keeping tabs on today and over the weekend:

• African peace mission: South African president Cyril Ramaphosa will lead leaders of Egypt, the Republic of Congo, Senegal, Uganda and Zambia on a visit to Ukraine and Russia in an ambitious attempt to end the war.

• Economic data: The EU has its harmonised index of consumer prices for last month.

• Companies: Investment bank Peel Hunt reports. Tesco chair John Allan will step down at the retailer’s annual meeting today, while online property agent Purplebricks will delist from London’s AIM market.

• Celebrations: The UK will mark the official birthday of King Charles III with the Trooping the Colour ceremony tomorrow, while several countries celebrate Father’s Day on Sunday.

Five more top stories

1. Exclusive: Tech and media giants are in talks to strike landmark deals on using news to train artificial intelligence. OpenAI, Google, Microsoft and Adobe have met news executives in recent months to discuss copyright issues around AI products such as text chatbots and image generators. Here are the publishers involved.

2. BlackRock could run the US’s first publicly traded spot bitcoin fund if its application to the US Securities and Exchange Commission is approved. The $9tn money manager already runs a private spot bitcoin trust that it launched last year. Here’s how the move could be a shot in the arm for the troubled crypto sector.

3. Exclusive: Soaring US demand for wind and solar power will create more need for natural gas infrastructure to act as a back-up against blackouts, said the boss of pipeline giant Williams Companies, arguing that policies meant to increase the use of electricity in cars and heavy industry will also increase load on the grid.

4. The UK government is “not on track” to clear its asylum backlog this year, the National Audit Office has warned, as record delays in processing applications have led to a near-doubling of support costs to £3.6bn in 2022-23. Read more on the 75,000-case pile-up.

5. The US banking regulator has kicked off the sale of Silicon Valley Bank’s German operations, seeking bids by July 19 for the collapsed lender’s loans, leases and other assets. Here are more details on the $460mn portfolio on sale.

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News in-depth

Turkey’s new financial leadership faces a daunting challenge as it seeks to pull the $900bn economy away from the brink. Finance minister Mehmet Şimşek and central bank governor Hafize Gaye Erkan will have to raise borrowing costs sharply and further depreciate the lira, with the country’s foreign currency war chest “dangerously” depleted by President Recep Tayyip Erdoğan’s unorthodox policies.

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Cruise ships pumped four times more harmful sulphuric gases into the atmosphere in Europe than passenger vehicles did last year, according to climate lobby group Transport & Environment. Barcelona ranks as the worst-affected port city in Europe for sulphur oxide emissions, which have been proven to cause acid rain and can aggravate respiratory conditions.

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Take a break from the news

Downhill skateboarding is a breathtakingly dangerous sport. But skaters such as Jenny Schauerte are part of a growing band of free spirits who travel the globe in search of the perfect descent. Simon Usborne’s hair-raising piece takes you inside their wild world.

Additional contributions by Benjamin Wilhelm and Gordon Smith