The job news on Wall Street has been bleak, but defying the trend is the nation's largest bank, which continues to grow its staff.
In JPMorgan's second-quarter earnings call on Friday, the firm said its headcount had increased firm-wide by about 8% from this time last year, and about 1% from last quarter, to more than 300,000 in total. Jobs have grown in every division despite the non-stop news about industry layoffs (think Goldman) and consolidation (think Credit Suisse).
JPMorgan Headcount by Bank Division
| 2Q23 | 1Q23 | 2Q22 | |
Consumer and Community Bank | 137,087 | 135,983 | 130,907 |
Corporate and Investment Bank | 74,822 | 74,352 | 69,447 |
Commercial Bank | 15,991 | 15,026 | 13,811 |
Asset and Wealth Management | 26,931 | 26,773 | 23,981 |
Corporate | 45,235 | 44,743 | 40,348 |
Entire Firm | 300,066 | 296,877 | 278,494 |
The most considerable headcount increase was in the consumer and community bank, which added more than 1,000 employees this quarter and more than 6,000 since this time last year. JPMorgan's population is now greater than some large US cities, including St. Louis, Missouri.
It's just the latest evidence that size matters in finance, especially in times of economic distress.
JPMorgan's headcount stands to grow even further this year thanks to its acquisition of First Republic, the San Francisco bank it acquired in May after the federal government took it over. Roughly 5,000 First Republic employees officially joined JPMorgan on July 2, after the quarter closed.
The growth comes at a difficult time for Wall Street banks, which have been bracing for more extensive loan defaults, especially in commercial real estate, and suffering a decline in the business of helping large companies with M&A and IPOs.
In a statement, a JPMorgan spokesperson said: "We regularly review our business needs and we adjust our staffing accordingly – creating new roles where we see the need or reducing positions when appropriate. Our strategy has not changed and we run the company to invest through the cycle. We are building for the long-term and will continue to invest in recruiting, training, and technology."
JPMorgan's investment banking rival Goldman Sachs cut staff three times in the last 12 months, including earlier this year when it handed out pink slips to roughly 3,200 employees or 6.5% of its total workforce.
JPMorgan is still spending on tech
Morgan Stanley in May said it would eliminate 3,000 jobs by the end of June, or roughly 5% of its workforce. Credit Suisse, meanwhile, has been losing staff at a rapid-fire pace since it was forced to merge with UBS.
JPMorgan has also been trimming staff, including in May when it cut roughly 500 jobs across various divisions — from commercial banking to asset and wealth management, according to Reuters. It has also cut about 40 high-paying investment banking jobs, and about 1,000 jobs from its home lending unit.
In explaining the 2Q headcount boost on Friday, JPM executives pointed to "higher compensation, including front-office hiring and technology investments" as part of the reason behind a 12% expense increase in commercial banking from last year. The bank has been spending big on technology to beat back fintech competitors.
In asset and wealth management, the firm said its 8% expense increase was "driven by higher compensation, including growth in private banking advisor teams, higher revenue-related compensation, and the impact of Global Shares and JPMAM China."
To be sure, compensation expenses are down slightly from last quarter but are still up by 9% from last year.
JPMorgan's outspoken CEO Jamie Dimon has been warning of a recession for some time amid rising interest rates and supply chain issues exacerbated by the war in Ukraine. On Friday, he said consumer spending remains strong.
"We're trying to be really clear here: The consumer is in good shape. They're spending down the excess cash," he said, according to the call and a transcript by AlphaSense. "Even when we go into recession, we're going with rather good conditions, low borrowings, and good house price values still," he said before adding that the economy is also dealing with the "unprecedented" challenges, from the war in Ukraine to high levels of government debt.
The bank reported record second-quarter earnings boosted by higher interest rates, which increased what they could charge on credit cards and other loans. Excluding First Republic, the bank brought in revenue of $38.4 billion, up 21% year-on-year. The bank also beat Wall Street's expectations and has again become a challenger to Goldman Sachs' spot as No. 1 in global mergers and acquisitions.
On Friday, JPMorgan's CFO, Jeremy Barnum, said that despite solid results, they are remaining "focused on the significant uncertainties relating to the economic outlook, competition for deposits, and the impact on capital from the pending finalization of the Basel III rules," but will "remain optimistic about the company's ability to continue delivering excellent performance through a range of scenarios."