The Financial Sector’s Job Shake-Up in 2023, More than 60 000 Layoffs


Two months ago we published an article about the declining satisfaction of IT and Finance employees. Now at the end of 2023 we can definitely say that it was a difficult year for both industries.

In 2023, the financial sector witnessed one of its most significant years of layoffs, with banks worldwide cutting over 60,000 jobs. This massive downsizing comes amid a challenging year for investment banks, which experienced a second consecutive year of declining fees as the number of transactions and initial public offerings dwindled. Consequently, top-tier Wall Street banks were compelled to slash their workforce to protect profit margins, as reported by the Financial Times.

Notably, the layoff trend in 2023 starkly contrasts with previous significant layoff periods, such as those in 2015 and 2019, which predominantly impacted European banks struggling with persistently low interest rates. In 2023, however, at least half of the job cuts occurred in major Wall Street institutions, severely affected by rapid interest rate hikes in the U.S. and Europe. Many banks reversed their pandemic-era hiring sprees, which were initially fueled by a booming demand for investment banking services.

The most substantial single-bank layoff came after the Swiss group UBS acquired its competitor, Credit Suisse, in March 2023. By November, UBS revealed it had already eliminated 13,000 positions, reducing its workforce to 116,000 employees. However, CEO Sergio Ermotti warns that 2024 will be a pivotal year for the merger of Switzerland’s top two banks, with analysts expecting further layoff announcements in the coming months.

Interestingly, the banking sector in Romania has not been as significantly impacted by the global trend of layoffs. The country’s banks have demonstrated resilience amidst the economic shifts, possibly due to different market dynamics and regulatory environments. This raises an intriguing question: as the world braces for what 2024 might hold, how will the banking sector, both globally and in regions like Romania, adapt and evolve in response to these continuous changes?

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