Editorial: Is there a bad guy in PNC Bank layoffs?

Layoffs are an unfortunate reality of doing business.

They happen for lots of reasons. They may be due to cash flow problems. They might stem from the seasonal nature of an industry. Sometimes they are just about trying to trim the fat as close to the bone as possible to maximize profits.

They can happen anywhere: a factory, a grocery store, a hospital.

And, as many people are finding now, a bank.

PNC Financial Services Group said Friday it was cutting its workforce by 4% by the end of the year.

PNC is not just any bank. According to the Federal Reserve, it is the sixth-largest commercial bank in the country, with 2,241 branches in more than two dozen states. It employs about 61,500 people. Almost 20% of those — about 12,000 people — work in the Pittsburgh region.

There is no confirmation of what positions might be cut or where they could be located, but 4% of the total workforce is about 2,400 people. The same chunk of the region’s employees is about 480 individuals.

The goal is to cut costs by $325 million.

“PNC, like everybody else, is facing revenue headwinds,” said Nathan Stovall, director of financial institutions research at S&P Global Market Intelligence.

Headwinds maybe, but PNC is not struggling. It had net income in 2022 of $6.1 billion. In 2020, it spent $11.6 billion on the acquisition of BBVA USA Bancshares, expanding the company’s scope in the Southwest.

But it has responsibilities to stockholders.

The jobs are on top of $450 million in “continuous improvement program” cuts already planned.

“All told, we are implementing more than $725 million of expense management actions that will have impact on 2024,” PNC CEO Bill Demchak said.

Banking is one of those industries where many jobs seem easily threatened by technology. Fewer people are walking into local branches to deposit paper checks when they can use an app on their phones or get digital deposits instead.

It makes sense that would mean trims to payroll, although one might hope that would be through attrition rather than pink slips.

PNC isn’t alone. It follows other layoffs in the industry including by leaders like Wells Fargo and JPMorgan Chase. Reuters reports others, including Goldman Sachs, are expected this month.

It’s a sad but across-the-board step being taken — the kind of thing that makes bottom-line sense but still makes you want to find someone to blame. Given the erratic economic climate with inflation and interest rates in flux, layoffs may just be the cost of doing business.