"The Biggest Reduction In History": Wells Fargo's Mayo Predicts 200,000 Banking Jobs Lost Over Next Decade
"The Biggest Reduction In History": Wells Fargo's Mayo Predicts 200,000 Banking Jobs Lost Over Next Decade
BY TYLER DURDEN TUESDAY, MAY 18, 2021 - 02:55 PM
Wells Fargo analyst Mike Mayo sees a major change coming in the
world of U.S. banks. In fact, he predicts that they
could wind up doing away with 200,000 jobs, or 10% of the industry's total
employee count, over the next decade.
The shift would come as a result of looking to increase
profitability in an age of automation and changing customer
behavior. “This will be the biggest reduction in US bank headcount in
history,” Mayo told the Financial
Times.
The jobs most at risk are in-person branch jobs and call
centers; as if it wasn't already difficult enough to get any banking
done in person or over the phone with an actual human being.
Mayo's analysis gels with Department of Labor predictions, which
are calling for a 15% decline in bank teller jobs over the next decade. In
addition to technological advancements, non-bank lenders entering the market
have also put pressure on banks, Mayo said.
Names like PayPal and Amazon entering financial services are
some of the concerns of high profile banking executives, like J.P. Morgan's
Jamie Dimon, who mentioned it in his annual letter to shareholders last month.
“Digitisation accelerated and that played to the strength of
some fintech and other tech providers,” Mayo says in his note. “We believe
that banks are likely to see headcount reductions accelerate as the economy
reopens and conditions normalize. Long-term, improving efficiency is less
luxury than necessity.”
“Banks must become more productive to remain relevant. And that
means more computers and less people,” he continued. He predicts that backlash
will be limited as most of the cuts can occur as a result of attrition, and not
layoffs, over the next 10 years.
He concluded: “If I was giving advice to my
kids, I’d say you probably don’t want to go into the financial industry. It’s
likely to be a shrinking industry.”
The U.S. banking sector has seen jobs remain roughly flat at
about 2 million for the last decade, FT reported.
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