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One reason Wall Street is so in love with weight-loss drugs in 2023 may be its own efforts to slim down.
Like many industries, finance scaled back its pandemic-era ambition, slashing headcounts and culling entire enterprises, both new and longstanding.
For all their differences, Wall Street and Silicon Valley had the same reaction to economic headwinds: layoffs. High-interest rates blowing up the mortgage industry and a dearth of dealmaking has its costs, and most big banks responded by handing out pink slips. Through the first three quarters of the year, big banks laid off a combined 20,000 employees, according to regulatory filings. That’s after most major players boosted headcounts by as much as 20% during the pandemic.
And it wasn’t just workers. At both Goldman Sachs and Citibank, entire units got the ax:
- It didn’t take long for Goldman to realize its golden touch wasn’t translating into a common touch – and it learned the lesson over and over. Goldman spent the year slowly but surely unwinding its consumer practice, and it’s now in the midst of an ugly early exit from its credit card deal with Apple.
- Citibank, meanwhile, is looking back even further. Earlier this month, the firm announced that it will exit the municipal market by early next year, meaning it will no longer underwrite or trade state and local government debt — a roughly $4 trillion market it once dominated. It also plans to exit the distressed debt trading business.
Chase Your Dreams: The industry outlier: JPMorgan, which remains the only major bank to add headcount through at least the first nine months of the year, according to regulatory filings (and Q4 has brought no news of layoffs, either). It seems CEO Jamie Dimon is still enjoying being “America’s Banker,” even if this year brought a few headaches along the way. Goldman CEO David Solomon, meanwhile, is still trying to convince everyone that his DJing hobby is not a distraction.