US Bank has recently announced a significant layoff cut, affecting thousands of employees across the country. The layoffs are a response to the current economic uncertainty.
The bank is cutting around 3,000 jobs, which is approximately 4% of its workforce. This move is part of a broader effort to reduce costs and improve efficiency.
US Bank is not the only financial institution to make such a move, as several other banks have also announced layoffs in recent months. The economic downturn has led to a decline in consumer spending and a decrease in loan demand.
The layoffs are expected to be completed by the end of the year, with some employees being offered severance packages and outplacement assistance.
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US Bank Layoffs
US Bank has recently announced layoffs in its mortgage division, citing a decline in mortgage originations in the first quarter of 2023.
The bank's total mortgage origination volume reached $9.6 billion from January to March, down 41.7% year over year.
US Bank is seeing a significant decline in mortgage volume amid surging rates.
The bank is trying to maintain a balanced portfolio between retail and correspondent lending.
In retail lending, US Bank originated $4.47 billion in volume from January to March, while correspondent lending volume reached $5.8 billion.
US Bank has a history of restructuring its staff, including a move in 2019 to close, consolidate, or move hundreds of branches.
This led to a 10-15% smaller branch footprint.
The bank is also seeing increasingly higher digital engagement among customers, with 72% of its active Consumer Banking customers being active digital customers in Q3 2019.
US Bank's Q3 2019 earnings revealed that 51% of its active customers are active mobile banking users for the first time.
The bank has announced unspecified job cuts amid staff restructuring at 3,000 US Bank branches.
The jobs of many employees, largely in middle management positions, will be eliminated and the bank will create more positions that deal with customers.
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US Bank will offer training and new job opportunities before resorting to layoffs in about two months.
A total of about 700 US Bank employees are being laid off, citing "changing business needs" as the reason.
This amounts to a roughly 1 percent decrease in its total staff of about 74,000.
US Bank has added close to 2,000 jobs companywide in the past year, and will be providing severance and outplacement assistance to the laid-off employees.
Reasons for Layoffs
US Bank is laying off employees due to changing business needs, as stated by a spokesperson. This is not the first time the bank has made such a decision.
The bank's mortgage division is experiencing a decline in originations, with a 41.7% year-over-year drop in the first quarter of 2023. This has led to a reduction in resources in certain roles.
US Bank is also restructuring its staff at 3,000 branches, eliminating middle management positions and creating new customer-facing roles. This decision comes after the bank announced plans to close, consolidate, or move hundreds of branches in 2019 and 2020.
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The bank is seeing increased digital engagement among customers, with 72% of its active Consumer Banking customers being active digital customers in Q3 2019. This has reduced the need for an extensive branch footprint.
US Bank's total staff has grown by about 10,000 over the last six years, with most of the increase happening in 2015 when the bank hired over 5,750 workers. The bank's hiring rate for the year is about on par with its performance in 2017.
Impact of Layoffs
Layoffs can have a ripple effect on the community, with many employees struggling to find new jobs.
According to a report, 80% of US Bank employees who were laid off in 2020 were not rehired by the company.
Layoffs can also lead to a decrease in consumer spending, as laid-off employees have less disposable income.
In 2020, US Bank laid off over 600 employees, which is a significant number compared to the company's workforce of over 70,000 employees.
The loss of income can be devastating for families, with some employees relying on their salaries to make ends meet.
The layoffs at US Bank also led to a decrease in the company's reputation, with some customers expressing dissatisfaction on social media.
Frequently Asked Questions
Does U.S. Bank offer severance pay?
Yes, U.S. Bank offers severance pay, which is calculated based on your weekly compensation rate, years of service, and target bonus percentage. To learn more about the specifics of your severance pay, please review our severance pay policy.
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