JP Morgan stock up on bank cutting 4,000 jobs

Jamie Dimon focuses on cost cutting in wake of Whale
Jamie Dimon focuses on cost cutting in wake of Whale
Image: AP Photo/Anja Niedringhaus
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This item has been updated

(Update: Dimon was in good form during JP’s investor day. He told shareholders that no one at the bank had to worry about losing their jobs because of making a mistake, an interesting assertion to make considering the management shuffles that occurred after the London Whale loss. He said he wasn’t into a culture where people make boatloads of money and then get “shot in the back of the head.” He also explained to an analyst why he’s richer than him and called JP Morgan “anti-fragile” because it does well during downturns.)

Before JP Morgan CEO Jamie Dimon sits in the hot seat this afternoon at the bank’s annual investor day, there is some happy news to investors: JP Morgan is cutting 4,000 jobs this year as part of its effort to reduce costs by $1 billion this year. The bank’s stock was up by more than 0.5% in morning trading.

The news was part of a presentation given this morning by new CFO Marianne Lake, who replaced Doug Braunstein as part of a management shakeup in the aftermath of a trading loss last year known as the London Whale. The big bet on credit derivatives had led to a loss of more than $6 billion at the bank and Dimon’s pay was cut in half to $11.5 million.

Dimon will likely have to answer more questions about the London Whale and the bank’s continuing efforts to reduce and police risk. The bank also said increased regulations, of which Dimon is a vocal critic, may cost the bank up to 10% of market revenues.

JP isn’t the only bank that is cutting headcount, though. Goldman is kicking off its annual job cutting rounds, while Barclays announced earlier this year that it was slashing 3,700 positions.