BNY Mellon to cut about 3% of staff

The bank says costs will be a top priority this year; it also says it's still committed to its digital assets strategy despite the turmoil in crypto markets.

Bank of New York Mellon Corp. is planning to lay off about 1,500 staff this year as the firm says costs will be a top priority for 2023.

The reductions account for about 3% of the bank’s 51,700 workforce at year-end, a person familiar with the matter said. The bank reported revenue of $3.92 billion in its fourth-quarter results Friday, missing analyst estimates.

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.

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 layoffs earlier. The bank’s workforce stood at 48,400 full-time employees at the end of 2019.

CRYPTO PUSH

The bank also said that it’s still commited to its digital assets strategy despite the collapse of FTX and the 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.”

In October, 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 U.S. regulators have heightened their warnings on the risks for banks that engage in crypto-related activities. Earlier this month, the Federal Reserve, the 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.

[More: Ben Harrison is suddenly alone at top of Pershing’s custody business]