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CIBC announces job cuts in wake of slower profit growth

Canadian Imperial Bank of Commerce unveiled several branches as well as a lounge area at Pearson International airport in Toronto, Ontario, Tuesday, November 25, 2014.

kevin van paassen The Globe and Mail

Canadian Imperial Bank of Commerce has become the latest Canadian bank to cut jobs, following an earnings season that showed slower earnings growth and rising expenses.

The cuts amount to about 1 per cent of the bank's overall work force of 44,500, according to a personal familiar with the matter.

"After careful review, we have made the difficult decision to selectively reduce a number of positions across CIBC," the bank said in a statement. "These reductions reflect an overall alignment of our resources that allows us to better serve our clients and ensure that we are operating efficiently."

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The cuts follow mixed fourth-quarter results, released in December. Earnings fell 1.7 per from the previous year largely because of weaker contributions from capital markets, slightly missing analysts' estimates. Full-year profits fell 4 per cent from 2013.

CIBC said that its job cuts are a response to changes in its operating environment, but that it will end up hiring as many as 5,000 additional employees in 2015 to bolster other areas of its operations.

Canadian banks have been struggling to contain costs, even as earnings rise to record highs.

Bharat Masrani, chief executive officer of Toronto-Dominion Bank, stressed last month the need to "increase efficiency and streamline our cost base," which was seen as a warning that job cuts are coming to TD.

Six months after Bank of Nova Scotia issued a similar statement in April, the bank announced 1,500 job cuts, including two regional heads.

The stock market is reflecting concerns that profit growth in Canada is being threatened by a slowing economy and reverberations from falling oil prices. In the case of CIBC, shares have slumped 14.7 per cent since early December.

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About the Author
Investing Reporter

David Berman has been writing about business and investing since 1995. He has written for a number of magazines, including Canadian Business and MoneySense. He worked at the Financial Post as an investing writer and daily columnist before moving to the Globe and Mail in 2008. More

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