A US bank is now preparing for massive layoffs which could affect more than 500 employees according to Bloomberg.
Ally bank, headquartered in Utah, began cutting jobs Monday in an effort that will shrink headcount by less than 5%.
Still, that figure could encompass more than 500 employees, according to a calculation based on Ally’s workforce from January, when headcount stood at 11,700, reports Banking Dive.
“After taking steps over the past year to pause hiring and manage staffing expenses through natural attrition, we have made the difficult choice to selectively reduce our workforce,” Ally spokesperson Peter Gilchrist told Bloomberg in an email.
“We remain confident in our long-term strategy, with a strong balance sheet and nimble, scalable businesses that are poised for future growth.”
The cuts will occur across divisions and are not isolated to one line of business, Gilchrist told Bloomberg, adding that Ally employees affected by the cuts can apply for openings elsewhere at the company.
“The Detroit-based bank is best known for its auto lending — and has stiffened its underwriting standards there.
It wouldn’t be alone in pulling back from the sector: BMO announced last month it will no longer originate indirect auto loans.
Citizens Bank in January said it aimed to scale auto-lending portfolio back to between $5 billion and $6 billion by 2024.
Then the bank chose in July to stop originating indirect auto loans”, says Banking Dive.
Even traditional banks such as Wells Fargo have announced upcoming layoffs leading until summer 2024.
Wells Fargo could lay off as many as 525 employees based in Columbia, South Carolina, and close the bank’s corporate office there by June 30, 2024.
1000 US Bank Branches Have Now Shuttered This Year
More than 1000 bank branches have now shuttered this year according to fresh data from the S&P Global Market Intelligence.
“The majority of Americans are concerned about widespread bank branch closures – which are hitting lower-income households the hardest.
Growing numbers of people are being left without access to basic financial services, as big-name banks have axed more than 1,000 branches already this year,” reports DailyMail.
“Data from S&P Global Market Intelligence shows a total of 1,144 national and regional banks were closed between January 1 and July 31 across 49 states – with firms pulling out of some areas at a faster rate than others.“
Wells Fargo is now scheduled to close 100 branches this year according to records from the Office of the Comptroller of the Currency (OCC).
“While the total number of branches continues to decline, new branches are being opened in high growth neighborhoods of existing markets, allowing us to offer more branch convenience,” the bank said.
A survey by DailyMail has found that 51% of Americans are ‘very concerned’ or ‘somewhat concerned’ about the impact of “dwindling outlets”, which disproportionately affect poorer households.
According to the analysis by research agency Opinium, 10% of Americans with a household income less than $50,000 said they do not have a local bank branch.
Grace Miller, research manager at Opinium, said: “Despite the majority of Americans preferring digital payment methods over cash, recent bank closures across the United States are still causing concern.
Notably, the digital transition showcases disparities in accessibility, especially for Americans with lower household incomes.”
According to the latest data, PNC has been the worst offender, shuttering a total of 201 bank branches in just seven months.
U.S. Bank and Wells Fargo were close behind, having closed 185 and 160 branches respectively.
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