Raymond James Financial has announced it’s laying off nearly 4 percent of its workforce.
The financial services company began laying off hundreds of employees on Tuesday at locations around the country, including its St. Petersburg headquarters.
As of Tuesday, the company had about 13,900 employees, including 5,000 in Tampa Bay. That would put the total number of layoffs at more than 500. A company spokesman declined to say how many local employees would lose their jobs, or where the losses would occur — but said that the cutbacks would return the company to employment levels comparable to early 2019.
The spokesman said none of the employees being laid off are financial advisors.
“We understand what this means for those impacted and their families, and for almost all of us it means parting ways with valued colleagues and friends,” Raymond James chairman and CEO Paul Reilly said in a memo to employees. “While 5 percent or higher job cuts may be an annual exercise at many firms, at Raymond James any reductions are rare and are never taken lightly.”
Founded in 1962 and public since 1983, Raymond James is one of Tampa Bay’s largest publicly traded companies, coming in at No. 396 on this year’s Fortune 500 list. It has a network of about 8,200 financial advisors managing $877 billion worth of client assets.
Reilly’s memo said that the company had already planned on “improving efficiencies” before the coronavirus pandemic, but was not anticipating “corresponding economic conditions and rate cuts that effectively wiped out half our earnings.”
Prior to the coronavirus pandemic, Raymond James had been looking at record revenues for the year. But in April, May and June, the company reported a 5 percent drop in revenue year over year, as well as a 34 percent drop in net income, to $172 million, in part due to extended low interest rates.
The company hinted at cutbacks in late July, including “both compensation and non-compensation expenses,” according to its most recent quarterly earnings report. For the first nine months of this fiscal year, the company’s compensation expenses had risen by 7 percent year over year. The fiscal year ends Sept. 30.
Raymond James' stock price closed at $74.34 on Tuesday, down $1.34 per share on the day.
Chris Steinocher, president and CEO of the St. Petersburg Area Chamber of Commerce, said he wasn’t surprised that a major company like Raymond James was struggling during the pandemic.
“Most companies, the larger you are, you are trying to determine how you can survive the uncertainty of our economy,” he said. “I understand it and I feel bummed for all the folks that are getting notices today.”
The silver lining, Steinocher said, is that “this isn’t a malfunction of a community that can’t support a business. It’s not about our market; it’s about the global market. … From the smallest business to the largest, I think everybody’s trying to examine their structure in this economy.”
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Raymond James executives said this summer that they were looking at other ways to streamline operations, including possibly reducing their office footprint.
Reilly’s memo said the company planned to make “meaningful investments in back-office modernization and technology," including a “forward-looking real estate strategy reflecting advances in remote work and changing client expectations.”
Reilly’s 2019 compensation, including bonuses and stock was $13.3 million, according to disclosures with the U.S. Securities and Exchange Commission. He said he and other top executives will undergo “a significant pay cut.”
Employees who are being let go will receive their full year’s bonus for this fiscal year, Reilly’s memo stated, along with up to a year’s severance for those who’ve been there the longest. U.S. employees will also receive 12 months of medical benefits and job placement support. Those outside the country will receive similar support.
“We do not intend to have another round of job eliminations,” Reilly wrote.