Raymond James lays off hundreds of employees after coronavirus dents earnings
A global pandemic and unprecedented economic upheaval have taken a toll on Raymond James. After years of growth, the firm is now laying off hundreds of employees.
In an internal email, Raymond James CEO Paul Reilly said the firm will cut less than 4% of its global workforce across business lines. With 13,900 employees, that could mean as many as 556 jobs lost.
Reilly and other senior leaders will also take a pay cut. Raymond James does not intend to do another round of layoffs, Reilly said.
The company’s net revenue fell 5% year-over-year to $1.83 billion for the second quarter, according to company earnings. Net Income plummeted 34% to $172 million.
Steve Hollister, Raymond James’ vice president of public communications, confirms the layoffs but said given recent growth, the total employee population now matches early 2019 levels. The majority of the positions eliminated are in corporate departments worldwide, but Raymond James is not sharing details of which job functions it is trimming, Hollister says. Cuts to advisor headcount and client support roles are limited to avoid impacting customer service, he says.
Despite the cuts, 2020 has still been a successful year for advisor recruitment, Hollister says.
The firm reported having 8,155 independent and employee advisors at the end of the second quarter, a net increase of 251 over the same period a year ago.
In his letter, Reilly said a “series of record-breaking years of growth” necessitated investment in resources in infrastructure, and that the firm entered 2020 focused on improving efficiencies for potential market turbulence.
“We were not anticipating a pandemic and the corresponding economic conditions and rate cuts that effectively wiped out half our earnings,” Reilly said in the memo.
On a call discussing Raymond James’ most recent earnings report, CFO Paul Shoukry said the firm was engaged in a firmwide evaluation of expenses. Though non-compensation expenses such as travel and conferences are lower due to the COVID-19 pandemic, Shoukry said “the unexpected swing in interest rates and the uncertainty that comes with the global recessions require us to evaluate ways to reduce costs and find efficiencies to remain well positioned for future growth and success.”
Raymond James is offering impacted workers a full year’s bonus for 2020, 12 months of medical benefits and professional job placement support. For more tenured associates, the firm is increasing payment to a year’s worth of total compensation.
The firm isn’t the only one eyeing layoffs as a measure to control costs. Facing similar pressures, Wells Fargo recently said it would resume cutting headcount but has not said how many positions it will cut.