JPMorgan is on the ropes.
As many as 10,000 more job cuts are on the table this year on top of previously announced layoffs — the brutal result of shrinking business and regulators prowling for blood, The Post has learned.
The latest setbacks at the largest US bank, employing 250,000 worldwide, are so stark, they could force CEO Jamie Dimon to throw in the towel, analysts say.
“It’s just beginning to hit them over the head,” said Nancy Bush, a consultant and strategic adviser at NAB Research. She believes JPMorgan is also caught up in massive global deleveraging, which is shrinking the entire financial system — and it’ll reverberate through trading markets. “Consumers have reduced their debt,” Bush said. “The government leveraged up to fill in that hole and is now going to start deleveraging. There’ll be layoffs at JPMorgan.”
Wall Street is also in the sights of lawmakers. “JPMorgan in particular has borne the brunt,” Bush said, referring to the acute regulatory oversight of financial players, “and they have to decide what business is going to stay, what’s going to go.”
A sprawling banking complex, with $2.47 trillion in assets, and no longer officially the world’s No. 1 bank, JPMorgan has been shedding employees since well before these latest shocks. The bank has laid off some 11 percent of its workforce since 2011, when it had 280,000 employees.
In February, it said it would eliminate 8,000 jobs in consumer and community lending. It’s posting weaker trading revenues lately, exiting a 400-person commodities unit, and sharply scaling back its mortgage lending, as well as in other activities such as student loans. On Tuesday, the bank said it would fire 155 employees in its Garden City, LI, mortgage department.
The bank anticipates revenue from trading, including fixed income and equities, to plunge 20 percent in the quarter — a hit of more than $1 billion to the balance sheet, by one estimate.
“A vendor who sells to JPMorgan was telling me projects at JP were put on hold in the equity division,” said one Wall Street exec who, like other sources, spoke on the condition of anonymity. “This would impact the jobs of computer programmers.”
Regulators slammed the brakes on JPMorgan’s risky but often lucrative prop-trading operations. This hurt other lines, too, just as the bank anticipates the next move by lawmakers who have vowed to clean up Wall Street. The most recent: JPMorgan is said to be shutting accounts of past and present foreign government officials to save on compliance expenses.
“I don’t know when Jamie Dimon finally throws in the towel and says, ‘I can’t take this anymore; this is absolutely absurd,’ but I am starting to believe that this point does exist,” said Dick Bove, a bank analyst at Rafferty Capital Markets.
Bove has a “hold” on JPMorgan’s stock. He fears a bloodbath: More job losses could soon be announced there, he says, with as many as 10,000 more employees emptying their desks. “I don’t know with certainty, but these cuts can happen fast,” he added.
On a human scale, the hit from lost prized jobs in trading and commodities is huge. A successful commodities trader can earn $1 million in a good year.
Not surprisingly, the mood inside the company is grim, several former and current JPMorgan employees told The Post. Some gathered in recent days at the tony Yale Club in midtown Manhattan to swap war stories over beer and shots.
“In the short term, I am not very positive,” one former trader said, lamenting how the bank fired 100 people, or 20 percent of its 500-person futures group, since last year. “The idea at JP Morgan is to combine the leftover commodities business with fixed income and currencies into the FICC business.” One current JPMorgan employee added: “People on the sell side here are definitely nervous.”
Bush said JPMorgan and Dimon, well regarded by his peers, have another problem: Dimon’s pay raise for 2013 — $20 million, up 74 percent from his 2012 comp. “I believe that JPM’s board of directors made a massive mistake,” she said.
Consultant Bush said docking his pay would likely have had a salutary effect, keeping federal prosecutors like Preet Bharara at bay. The suffering public would have applauded. As Bharara has made clear, Bush says, “no good is going to come of it.”
JPMorgan declined to comment for this story.