Bank of Montreal cuts nearly 1,000 jobs in fourth quarter to reduce costs

The Canadian Press
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TORONTO — The Bank of Montreal quietly made swift and widespread staff cuts in the fourth quarter, reducing its workforce by the equivalent of nearly 1,000 positions.

Chief operating officer Frank Techar confirmed Tuesday during a conference call to discuss the bank’s fourth-quarter results that BMO made the cuts in an effort to reduce expenses and make the bank’s overall operations more efficient.

The total reductions were “full-time equivalent” positions, which are calculated on an average work week, but can include part-time jobs.

“We did see a big reduction in the head count,” he told analysts in a financial results conference call.

But he conceded that the bank may have actually laid off too many people at once.

“For the quarter, we overshot a little bit,” he said. “We do have some outstanding vacancies that I would expect we will fill as we go into the first quarter.”

Typically, a public company issues a news release about significant layoffs as part of its disclosure practices, although Canadian banks haven’t always followed that practice.

Most of the cuts were made at the Bank of Montreal’s Canadian personal and commercial banking operations, where about 730 jobs were eliminated.

At the end of the fourth quarter, BMO had about 45,631 employees across its business, which includes its U.S. banking operations, wealth management division and capital markets.

The last time BMO made deep cuts to its workforce was when it laid off three per cent of its staff in 2009 amid widespread economic uncertainty.

Strong quarter

Meanwhile, there’s a divide be­tween how the Bank of Montreal is characterizing its fourth-quarter results and the underwhelming reception from analysts and in­vestors.

The Toronto-based bank said Tuesday that growth in Canadian loans and its wealth management division helped deliver a strong quarterly net income of $1.09 billion, which was about one per cent higher than a year earlier.

But several analysts say there is a notably different story beneath the headline figures.

“When you start digging into the numbers, it looked pretty disappointing to me,” said Tom Lewandowski, a financial services analyst with Edward Jones in

St. Louis, Mo., who said BMO fell “well below” his expectations.

He pointed to weakness in the bank’s U.S. operations as one key area that fell short.

Adjusted net income for the quarter fell two per cent from a year ago to $1.102 billion. That was well ahead of estimates, but included a one-time $121-million gain that one analyst said would put off investors.

BMO’s overall adjusted earnings including the one-time gain amounted to $1.64 per share, down one cent from a year earlier, but ahead of analyst estimates of $1.58 per share.

Organizations: BMO, Bank of Montreal

Geographic location: U.S.

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Recent comments

  • Pete
    January 03, 2014 - 11:40

    Please let me know what is the name of your company as I sure as hell don't want to work for scums like you. But then again, for some who claims to be so busy that he/she actually have time to post a comment on the web? I just have to wonder, maybe you should do your company a favour and fire yourself as you sure as heck not contributing. You are the 0.5% dude.

  • a business man
    December 04, 2013 - 10:24

    Nothing wrong here folks. BMO is a business and its decision was to "reduce expenses and make the bank’s overall operations more efficient". That is the job of management. IN my company, we have by-weekly meetings to talk about (among other things) how we can do more work with less people. My company is very profitable, and have been making more and more money every year. I am a laywer by trade, and at the company as a figure-head and money-taker because I own the company. I essentailly pay myself just under 6 figures to oversee the decisions. I am so busy with my law practice that I don't have time for this company. But my standing mandate is no matter how much we make, we must do more with less people. That is the extent of my oversight: "have we fired any employees recently; if no, why not?" Even shedding 0.5% of our workforce is a good thing, because it is still savings. Nationally, my company has laid off about 700 people this year, and like the BMO, we did it to "reduce expenses and make the ... overall operations more efficient". Honestly, we could have afforded to continue to pay these people and made lots of money, but that would have made the company less efficient and likely would have cut into MY salary. Yes, as a lawyer with a big firm, I do not need the close to 6 figures that I get from my company, but it is MY company and I would be a fool to not take it, like I would be a fool for not ensuring that my company laid-off 700 people who we could do without even though we could afford to pay them and still yield a health profit. In short, business do not exist for the benefit of the employees; businesses exist for the benefit of the owners and shareholders.

  • P F Murphy
    December 04, 2013 - 07:52

    $4.2 billion in profit and they layoff 1000 people? I guess they needed the money to pay their CEO $10-20 million. If BMO doesn't support their workers, why should we support BMO? They should change their their name to Bank of Massive Profits and Amorality.

    • Jeff
      December 04, 2013 - 09:29

      @ PF Murphy. Communist!