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JPMorgan's investor day says it will cut investment in bankers & traders to $100m in 2024

JPMorgan is hoping for a soft landing, but is wary of rocks

It's investor day at JPMorgan. ✨ At JPMorgan's last investor day in 2023, it said it would be investing $200m in bankers and traders. One year on, it's still hiring in the commercial and investment bank (CIB) although less enthusiastically than before. 

Speaking today, Daniel Pinto said that while a soft landing for the economy is likely, there are also "quite substantial" tail risks linked to geopolitics and higher than historic inflation: "If we are wrong, we need to be prepared for how we are going to position the company in a proper way," he cautioned.  

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JPMorgan will be investing $100m in "revenue producers/revenue adjacent" roles in 2024

In 2023, JPMorgan said it would be spending $200m on new revenue producers and revenue adjacent roles. This year, that investment has been cut to $100m. JPMorgan's front office hiring will be 50% less zealous. 

Where will the $100m of hiring happen? JPMorgan says it wants to "accelerate" growth with corporates in "key corridors" in 2024. 

Last year, JPMorgan said it would be hiring bankers focused on financial sponsors, private capital, international, and carbon transition. This year, the bank is less clear, but it says it wants to add bankers across "all global industry coverage teams," to "enhance M&A and ECM capacity and expertise," to add to its middle market coverage and to "deepen" coverage in "high potential regions." Those regions are EMEA and APAC, where the bank says it wants to "strengthen" its presence. 

JPMorgan wants more middle market bankers 

JPMorgan said today that it has 700 middle market bankers after declaring its intention of hiring 500 small business bankers in two years in 2023. It's now setting up a specific team to focus on middle market financial sponsors, but its not clear how many middle market-focused hires it has left to make.

JPMorgan is all about "innovation" bankers 

Between 2022 and 2023, JPMorgan says it increased it number of bankers focused on the "innovation economy ecosystem" by 150%. Bankers in this area are focused on: software, fintech, disruptive commerce, health tech, applied tech, internet, climate tech and life sciences. It's not clear whether hiring will continue at the same pace in 2024, but innovation banking remains an area of focus, along with "coverage of VC clients and portfolio companies." 

JPMorgan is investing in e-trading and market structure 

JPMorgan is still focused on improving its e-trading capabilities and is investing in market structure expertise. It may also be hiring people who can interface with multistrategy hedge funds: the bank says it wants to deepen relationships with "increasingly complex financial institutions" and "non-banks." 

JPMorgan plans to invest in private credit 

Goldman Sachs wants to triple its private credit exposure. JPMorgan isn't putting a number on its aspirations, but today's presentation confirms its intention of expanding in private credit too. Bloomberg reported in January that JPMorgan was in talks to secure up to $3bn of third party investments for its private credit deals. 

JPMorgan is investing in data, technology and AI, but the biggest growth is in regulatory tech

When JPMorgan announced plans to ramp up technology spending last year, it caused some disgruntlement among investors. In today's investor day presentation, JPMorgan says it plans to increase technology spending in the CIB specifically from $3.4bn in 2023 to $3.6bn in 2024, an increase of 3%.

Within the CIB, technology spending is broken down between platforms, products and experiences, infrastructure modernization, and regulation, risk and controls.

$2bn of JPMorgan's 2024 CIB tech spending is allocated to platforms, products and experiences, which includes electronic trading, pricing and risk management and data solutions. This is up 5% on last year.

$1.2bn of JPMorgan's 2024 CIB tech spending is allocated to infrastructure modernization. This is the same as last year.

$0.4bn of JPMorgan's 204 CIB tech spending is allocated to regulation risk and controls. This is up 33% on last year and has doubled since 2019. If you want to work in tech in JPMorgan's investment bank, this is where the really big growth is. 

JPMorgan is investing in AI 

As we noted last month, JPMorgan already employs around 2,000 people in artificial intelligence. Speaking today, Pinto said JPMorgan's AI use cases now generate the revenue equivalent of between $1bn to $1.5bn across the bank.

However, investments in AI are also creating opportunities to cut headcount. Pinto also said today that JPMorgan employs 60,000 developers and 80,000 people in operations and call centre jobs.  The bank wants to use AI to cut this headcount - it's already managed to increase efficiency in one area while cutting headcount by 20%. "The idea is to look at everything," said Pinto. Mary Callahan Erdoes, the chief executive of the asset management arm arrived at stage today to a cheesy song she said had been written by AI; presumably this functionality won't displace any existing staff. 

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 Photo by Jonathan Ybema on Unsplash


AUTHORSarah Butcher Global Editor

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