Truist Financial Corp. will embark on “sizable” job cuts as part of the firm’s efforts to trim expenses by $750 million in the coming months.
(Bloomberg) — Truist Financial Corp. will embark on “sizable” job cuts as part of the firm’s efforts to trim expenses by $750 million in the coming months.
The Charlotte, North Carolina-based firm is looking to limit expense growth to 1% in 2024, compared with the 7% it expects for this year, according to a presentation on the company’s website. The job cuts should help the firm achieve $300 million in savings alone.
“I’m highly aware that our financial performance has not met all of your expectations,” Chief Executive Officer Bill Rogers said during the Barclays Global Financial Services Conference on Monday. “Not met mine, either.”
Efforts to improve underlying technology will save Truist another $200 million over the next 12 to 18 months, according to the presentation. Separate plans to restructure and consolidate certain businesses, including by making the firm’s branch network more efficient, should also deliver $250 million in savings.
Truist investors have increasingly grown concerned in recent months about expense discipline at the third-largest US regional bank by assets. Analysts led by Wells Fargo & Co.’s Mike Mayo said the 7% increase in costs the company forecasted for this year would likely be the biggest increase of any major US bank.
Read more: Truist Primed for Activist Push on Costs, Governance, Mayo Says
Truist shares rose 0.8% to $30.03 at 2:51 p.m. in New York. Still, shares of the company have slumped 30% this year, outpacing the 20% decline of the KBW Bank Index.
The latest plan for reducing expenses largely mean that costs will remain at elevated levels for at least a year, Mayo said in a note to clients. They also warned that job cuts often come with severance charges.
“It at least shows management is taking tougher actions,” Mayo said. “Questions remain if this is enough.”
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