26-Feb-14
JP Morgan Chase plans to eliminate 8,000 people this year, as part of its mortgage business and shrinking its huge branches of the bank aimed at controlling costs.
About half of the layoffs have been announced. JP Morgan Chase is planning to cut more jobs - 251,000 of about 3% of its total workforce - as it tries to reduce the $ 2 billion in consumer banking fees by the end of 2016 . But the bank said it would increase this year in other areas of about 3,000 jobs.
The new layoffs announced Tuesday at its mortgage and retail banking. The bank also cut down on those areas 16,500 jobs last year.
JPMorgan's mortgage business , like other big banks , are falling because more Americans to refinance home loans . Since after the economic recession, low interest rates caused a mortgage refinancing boom . But interest rates began to rise in the middle of 2013 .
"We see a lower amount , because we are experiencing the first quarter of 2014 , " Gordon Smith, who runs the company's consumer and community banking business said. The company said its mortgage business will lose money this year . Smith and other executives at JPMorgan 's Investor Day speech in New York , which is webcast .
November , his company agreed to pay $ 13 billion to resolve a civil investigation of its sales collapse in the value of low-quality mortgage-backed securities. It also announced its $ 4.5 billion settlement with 21 major institutional investors in 2005 and 2008 and Bear Stearns issued mortgage-backed securities. JP Morgan Chase acquired Bear Stearns in 2008 .
" This is the most painful continued , " Jamie Dimon , chairman and chief executive officer of the company . He added that it would be reasonable , investors should ask why they mortgage business . But mortgage is an important product of the most critical of Americans and their banks , he said .
"If I had a choice, I could never default ," he said. "I will tell who has a mortgage with any of us , ` you 60 days late, and we sell mortgage loans, and we do not want to do any business with you . " It's just too painful. "
The company also reduced the number of share options it offers mortgages . It gets rid of some of the home equity loan with fixed payments . It also got rid of some of the interest-only mortgages, which also forced the borrower in the back to cover a greater role. By the end of this year, will cut its mortgage and home equity options from 37 down to 15.
JP Morgan also designed to keep the lid on costs in its branches . The number of branches will be flat this year and next year , Smith said. The bank also plans to reduce the size of the branch , more and more customers online banking , or automated teller machines .
Changes in the ATM has been carried out for decades , but the phone banks - including checking by capturing photos , the ability to make deposits - refers to some customers never even leave their house. Nearly 10 percent of the deposit , and now through mobile phone manufacturers , said Barry Sommers , head of Chase 's consumer banking .
" As the transaction is transferred to mobile devices and Chase.com ... you will see a decrease ," the cashier and other service personnel, Sommers said.
Summers stressed that the branch is still important . He noted that nearly three-quarters of Chase customers visit a branch every three months. Branches are used for deposits and withdrawals is a place to get suggestions to open an account or a place to move to loan officers , he said.
This shift in favor of the bank's bottom line . Electronic deposit costs about 3 cents to deal with compared to the bank teller if completed by 65 cents , the company said.
JPMorgan chase's stock fell $ 1 , to close at $ 57.03 . The stock is $ 59.82 near its 52- week high of .
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