Job cuts at Ally could impact over 500 workers, according to a recent report
Wells Fargo announced last week that it will be laying off 525 workers from its corporate office in Columbia, South Carolina. This move is part of a broader trend of job cuts in the banking industry, with Ally Financial also reducing its workforce.
Ally Financial, like many other companies, has taken steps to manage staffing expenses over the past year. This includes a pause on hiring and, as a result, the potential number of employees affected by the job cuts could exceed 500. Affected employees, however, can apply for openings elsewhere within the company.
Similarly, BMO announced last month it will no longer originate indirect auto loans. Other companies following this trend include Citizens Bank, which aims to scale its auto-lending portfolio back to between $5 billion and $6 billion by 2024, and Citi, Truist, Barclays, and Goldman Sachs, which have indicated they expect to shrink headcount.
SAP expects to cut between 1,100 and 2,200 jobs annually, while the Bavarian metal and electrical industry cut 18,000 jobs in the first half of 2025. Helvetia is reducing 55 jobs, and Sintetica is cutting 500 positions worldwide, with 250 in Switzerland.
Each disruptor has its own unique approach to disrupting the banking industry. For instance, Ally Financial upgrades its network of partner auto dealers from 30 to 100 in September, with a goal of hitting 1,000 next year.
Despite these challenges, Ally Financial remains confident in its long-term strategy, with a strong balance sheet and scalable businesses. The job cuts are not limited to one line of business but will occur across various divisions within the company. The decrease in headcount will result in less than 5% of Ally Financial's total workforce.
The job cuts and industry disruption are signs of a changing landscape in the banking sector. As multiple schools of thought emerge on how to disrupt the space, it is clear that traditional banking practices are being challenged and will continue to evolve.
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