JPMorgan Chase & Co said it is cutting up to 14,000 jobs, more than previously disclosed, as it tries to reduce costs in the face of a slumping economy and higher credit losses.
The second-largest US bank on Thursday said it now expects to shed as many 12,000 jobs from integrating the former Washington Mutual Inc, up from 9,200 announced in December. It also expects to cut up to 2,000 investment banking jobs.
JPMorgan announced the cuts in an all-day presentation to investors. The reductions are intended to help the New York-based lender weather the current economic turmoil, as its customers struggle with falling house prices, tight credit and increasing mortgage and credit card defaults.
Financial companies have announced close to 350,000 job cuts since August 2007, outplacement firm Challenger, Gray & Christmas has said.
JPMorgan expects $2.75 billion of savings from Washington Mutual, offset by $750 million of new investments. Retail banking chief Charlie Scharf expects most of the savings by the end of 2009, sooner than originally thought.
The bank in September paid $1.9 billion for the banking units of Washington Mutual, the largest US bank or thrift ever to fail. It is shutting several hundred branches, but plans to open 120 new branches this year. It has more than 5,000 branches, up from 539 as recently as 2003.
Meanwhile, JPMorgan's investment bank expects to reduce its 28,000-person staff to between 26,000 and 27,000 by year-end, with cutbacks focused in technology and infrastructure, the unit's co-chief executive, Steve Black, said. Staffing could fall further if market conditions worsen, though it is "hard to imagine" a worse year for the unit than 2008, he said.
On Monday, JPMorgan unexpectedly cut its dividend 87 per cent to help save $5 billion a year and achieve Chief Executive Jamie Dimon's goal of a "fortress" balance sheet. The bank got $25 billion last fall from the government's Troubled Asset Relief Program.
In afternoon trading, JPMorgan shares were up $1.82, or 8.4 per cent, at $23.55 on the New York Stock Exchange. The KBW Bank Index of large US lenders was up 6.3 per cent.
HOME EQUITY, CREDIT CARDS UNDER PRESSURE
JPMorgan told investors that excluding Washington Mutual, it expects losses of $1 billion to $1.4 billion in each quarter this year from home equity loans to more creditworthy borrowers.
It said as many as 41 per cent these borrowers will owe more than their homes are worth by the end of 2010,