(NEW YORK) — JPMorgan Chase & Co. has announced it will cut 17,000 jobs by the end of next year, many of them in its mortgage banking business.
JPMorgan Chase is the biggest bank in the country by assets. The company will shed about 6.5 percent of the 260,000 employees it said it had as of May 2012.
JPMorgan CEO James Dimon and other executives made the announcement on Tuesday during an investor day presentation at the bank’s New York City headquarters.
Amy Bonitatibus, spokeswoman for J.P. Morgan, said the bulk of the reductions are in the company’s mortgage banking business.
“Fewer homeowners are falling behind on their mortgages, so we need fewer employees to assist those who are struggling,” she said in a statement. “We will work with affected employees to find openings at Chase or other local companies.”
Anthony Polini, banking industry analyst with Raymond James, said the job cuts were expected given the anticipated revenue decline from mortgage banking and the improvement in mortgage-related credit quality.
By all other indications, the bank appears to be among the healthiest in the country. In January, JPMorgan reported $5.7 billion profit in the fourth quarter, better than analysts had expected and up from $3.7 billion a year ago in the same period.
Investors also seem to approve of Tuesday’s announcement. JPMorgan’s stock rose 2.5 percent to $48.81 at 11:15 a.m. ET.
Prior to the earnings announcement last month, JPMorgan said it would take a $700 million charge in the fourth quarter due to the nationwide mortgage foreclosure and servicing settlement with the Justice Department and nine other banks.
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Wayne Drash, CNN
James Hanlon, CNN
Tana Bolinger, FamilyShare
Adam Forsgren, EastIdahoNews.com Columnist