Why is there a hiring freeze and layoffs when JP Morgan has set record profits?
Jamie’s contrarian bet on expanding their branch network is backfiring.
They probably automated a lot and have repeatable processes. No need for people.
Which area are the layoffs in? Not engineering I’m guessing.
Engineering is actually going through layoffs as well.
That’s probably due to the decrease in interest rates by Fed. That will impact their profitability forecast
Layoff rumor has was there since 5 to 6 months, became a reality just a few weeks ago.
Which location ?
Inverted yield curve
As a technologist, the most important thing to know about JPMorgan is that it views technology talent as fungible expenses to be minimized at all costs. This is why management pushes work to lower cost centers domestically and off shore, even if that decision sacrifices business value and/or product quality. It's also why devops / SRE and choice seating are being imposed on more and more teams. Tech management's top priority is reducing costs because their bonuses are a function of the "profitability" of their team. In summary, tech management has two and only two priorities: deliver only the minimum amount of work required to stay green on scorecards, and cut costs as much as possible.
What is “choice seating”?
It's a real estate cost cutting measure where employees (i.e. fungible resources) no longer have permanent desks. Rather, people are subscribed to neighborhoods of workstations that they must book in advance. Usually the neighborhoods are oversubscribed (like 9 desks per 10 employees) because the assumption is that daily office attendance is never 100%. So in the case where the desk per employee ratio is 9:10, the company just saved 10% on real estate. Of course this system winds up costing more in the long run because employees waste about 10 to 20 minutes per day booking seats, setting up and breaking down workstations, and occasionally bickering with each other about who actually reserved which seat. This is all lost productivity. Multiply those minutes wasted by salary and the added costs surely outweigh the benefits. And of course management is exempted from choice seating. They either get permanent desks in the neighborhood, or permanently assigned private offices elsewhere on the floor. But that's just business as usual for management of JPM.
They know a recession is coming.
Their profits are increasing, not necessarily their revenue. Which means they could just be cost cutting. You’d have to break it down by division to get a clearer picture.
People don’t hire or fire based on profits. They hire or fire based on available work. That’s why you don’t always see hires go up as profits go up. If there isn’t more work to do, they aren’t going to hire.