JPMorgan Chase will cut 8,000 jobs by the end of this year, the nation's largest bank announced on Tuesday. The bank also said it will reduce its profitability goal, Reuters reported.
Nearly 6,000 full-time jobs from Chase's home loan units will be cut, along with 2,000 jobs from the branch and credit card network. The total headcount this year is expected to decrease 5,000 to 260,000, Reuters reported. However, the bank did say it anticipates adding 3,000 jobs.
Chase will save an extra $2 billion a year with the cuts.
Jamie Dimon, Chase's Chief Executive, said the job cuts are due to business changes in the bank.
"You're always trimming the sails. That's business," Dimon said, Reuters reported. "Obviously headcount is coming down in some of the business. That's life."
By 2015, the number of Chase employees will most likely have declined 20 percent since 2011, said Gordon Smith, the company's head of Consumer & Community Banking, Reuters reported.
The massive cuts are a result of a drop in demand for refinancings, which in turn have reduced because of higher interest rates, USA Today reported.
For example, Chase refinancing fell nearly 24 percent in 2013. The bank's mortgage lending also fell 8 percent to $166 billion the same year, Reuters reported.
Because the bank is unable to use its debt to fund its assets, profits will most likely take a hit, Reuters reported. Chase previously estimated a 16 percent return of profits. Now, that estimate has been reduced to between 15 and 16 percent, Chief Financial Officer Marianne Lake said.
Chase is not the only bank to lay off home loan, or mortgage, workers. Bank of America let go of mortgage workers, as well as Wells Fargo. Both company's losses are also due to higher interest rates that turned homeowners away from refinancing, Reuters reported.
