BNY Mellon to cut about 3% of staff as Wall Street retrenches

Bank of New York Mellon, which employs about 1,700 in Ireland, is planning to lay off about 3 per cent of its global staff this year as the US lender says costs will be a top priority for 2023.

The firm had about 51,700 in its workforce at year end. The bank reported revenue of $3.92 billion in its fourth-quarter results Friday, missing analyst estimates.

The lender employs most of its Irish staff in the funds industry in Dublin, Wexford and Cork. It has operated in Ireland since 1994.

BNY Mellon said in a statement that it had $213 million of fourth-quarter expenses tied to costs including severance and litigation reserves, though it didn’t break out the split. The firm said its $246 million increase in overall costs in the period was primarily due to severance.

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Chief executive Robin Vince said on an earnings call that costs are a focus this year. “That will come from instilling further expense discipline across the firm and from focusing more on profitable new business growth, saying no to more things, when the economics aren’t what they should be, he said.

The cuts will focus on management positions, according to the Wall Street Journal, which reported news of the lay-offs earlier. The bank’s workforce stood at 48,400 full-time employees at the end of 2019.

The bank also said it is still committed to its digital assets strategy despite the collapse of FTX and turmoil in crypto markets.

“This will continue to be a focus for us, not so much for crypto, but really the broader opportunity that exists across digital assets and distributed ledger technology, Vince said on an earnings call with analysts on Friday. “If anything, the recent events in the crypto market only further highlight the need for trusted regulated providers in the digital asset space.

The bank in October launched a crypto custody platform that allows some clients to hold and transfer Bitcoin and Ether. BNY Mellon, along with U.S. Bancorp and State Street, are among the traditional banks that have ventured into the crypto custody space. The New York-based bank didn’t disclose revenues or other data related to its crypto custody offering.

Top US regulators have heightened their warnings on the risks for banks that engage in crypto-related activities. In January, the Federal Reserve, Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency issued a fresh warning to lenders, saying events of the past year exposed vulnerabilities in the crypto sector. – Bloomberg