JPMorgan Chase & Co could cut as many as 4,000 of its own employees worldwide as the bank prepares to take on staff from Bear Stearns Cos at the same time it deals with turmoil in financial markets, people familiar with the situation said on Tuesday.
In addition to roughly 2,000 JPMorgan employees who will be replaced by counterparts acquired through its takeover of Bear Stearns, the sources said that an additional 1,000 to 2,000 JPMorgan employees may lose their jobs because of the slowdown in investment banking activity and credit market crisis.
Final decisions dealing with specific employees have not been made, though JPMorgan is expected to decide on market-related cuts by early June, the sources said.
JPMorgan, which expects to complete its takeover of Bear Stearns around June 1, told investors on Monday the bank had made decisions on about 10,000 of Bear’s nearly 14,000 employees.
Morgan Chief Executive Jamie Dimon told investors the bank had extended job offers to about 6,000 Bear staffers, leaving decisions still to be made on the remaining 3,500 Bear staffers. Most of these employees work in technology and operations, a person familiar with the matter said.
The sources also said that of 6,000 Bear staffers offered jobs, a little more than half are regarded as “lift and drops,” meaning employees who can be lifted from businesses where JPMorgan is not strong, such as prime brokerage, clearing, energy trading and some investment banking coverage.
Among 2,500 to 2,700 Bear staffers who have been offered jobs, some will fill operations, finance and other roles required in a larger company. But an unspecified number of these staffers overlap with existing JPMorgan staffers, and JPMorgan is expected to cut roughly 2,000 of its own employees.
On a net basis, the Bear merger would boost JPMorgan’s total headcount by 4,000 to about 184,000 worldwide, the sources said.
JPMorgan came under fire in March after it acquired a nearly-insolvent Bear with involvement of the Federal Reserve and at a fire-sale price. Since then, Morgan executives have worked carefully around personnel decisions, worried that wholesale job cuts would generate more bad publicity.
