Industry analysts say the U.S. banking industry could cut 200,000 jobs, or about 10 percent of total employment, in the next decade in response to changing customer behavior and to improve profitability.
Wells Fargo analyst Mike Mayo told the Financial Times of London, “`This will be the largest layoff in the history of the U.S. banking industry.” If his prediction is confirmed, then this year will be a turning point for the U.S. banking industry. The number of people employed in the banking industry has remained roughly the same at 2 million over the past decade.
Mayo’s report found that the highest-risk jobs are in branch and customer service, as banks downsize their vast networks to accommodate the new realities of banking in the wake of the Newcastle pneumonia (CCP virus) epidemic. The report coincides with U.S. Department of Labor statistics, which predict a 15 percent reduction in the number of counter staff at banks over the next decade.
Historically, layoffs have been a controversial issue in the banking industry, especially in low-paying jobs, and are often cited by politicians who exalt progressivism as an example of wealthy industries putting profits over employees.
But technology companies and non-bank lenders are eating into the payments and lending business traditionally dominated by banks, and the threat is growing, Mayo said. As a result, the banking industry needs to cut jobs.
Banks must become more productive to remain relevant,” Mayo said. That means more computers and less manpower.” He also said that the banking industry can reach the reduction target in the next 10 years by not filling the vacancies, so as to reduce the risk of staff rebound.