TD Bank Slashes Workforce by 2% in Major Restructuring Effort
TORONTO — On Thursday, TD Bank Group announced that they will be reducing their staff by approximately two percent. The move aims to cut expenses and reallocate funds following recent changes in leadership.
The layoffs total slightly more than 2,000 workers, based on the approximately 101,800 employees it had last year.
As TD announced during the release of its second-quarter profits totaling $11.1 billion, it’s worth noting that the earnings were bolstered by an after-tax gain of $8.6 billion resulting from the disposal of its stake in Charles Schwab Corp.
The share sale and layoffs follow TD’s efforts to recover from the significant anti-money laundering compliance failure that cost them more than $3 billion in penalties last year. This issue prompted U.S. regulators to impose restrictions on their assets stateside and led to the resignation of former CEO Bharat Masrani.
Raymond Chun, the current CEO who assumed his position at the beginning of the second quarter, stated that the bank is striving to move forward.
“By meticulously examining our operations and procedures, we are systematically cutting expenses throughout the bank,” Chun stated during an earnings call on Thursday.
“I want to thank our colleagues across the bank for their tremendous dedication and efforts. Together, we are writing the next chapter of this great institution’s story.”
As part of an extensive overhaul, the bank plans to reduce its property holdings, scale back certain operations, and dispose of some assets, according to Chief Financial Officer Kelvin Tran. This transformation includes workforce reductions.
He stated that the bank aims to implement the job reductions as much as possible via natural turnover and will additionally reallocate staff to departments where it is focusing on growing its skills and capacities.
In the quarter, TD incurred a pre-tax expense of $163 million due to the restructuring, primarily stemming from real estate adjustments. The company anticipates an additional pre-tax expenditure of approximately $650 million spread across future quarters for severance and various other expenses.
The statement indicated that the restructuring is expected to result in approximately $600 million in yearly pre-tax savings once completed. This funds will be reinvested into areas like artificial intelligence and technology within the company, according to Tran.
He stated that through this restructuring initiative and the broader strategic review, they are working on innovations to enhance efficiency and fundamentally lower the bank’s cost structure.
These actions are also occurring as firms across the board contend with broad economic unpredictability and cautious consumers and enterprises.
Chun observed that housing activity decreased during the quarter. Additionally, the bank has noticed reduced foreign currency expenditures as consumers have become more careful, particularly when making cross-border purchases.
But the bank’s provisions for potentially bad loans rose only modestly in the quarter, up $103 million from the previous quarter to $1.2 billion, or up $211 million from the same quarter last year.
The provision levels were set below what analysts anticipated, enabling TD’s adjusted earnings of $1.97 per diluted share to surpass the predicted $1.76 per share profit as reported by LSEG Data & Analytics. Nonetheless, this figure declined slightly compared to the $2.04 per share earned during the corresponding period the previous year.
In a statement, Jefferies analyst John Aiken noted that TD exceeded expectations across most sectors; however, he questioned whether the markets would view the provisions as adequate given the uncertainties looming ahead.
TD indicated that the rise in provisions was connected to policy and trade uncertainties, whereas without these factors, they might have expected rates to possibly decrease due to consumers benefiting from reduced interest rates.
The revenue for the quarter amounted to $22.9 billion, an increase from $13.8 billion recorded in the corresponding period of the previous year.
TD reported that its Canadian personal and commercial banking division made slightly less than $1.7 billion this quarter compared to just over $1.7 billion during the corresponding period last year. This decrease was due to increased provisions for credit losses and higher non-interest expenses, although these were partly offset by greater revenues.
In the second quarter, TD’s U.S. retail operations reported earnings of $120 million, which is a decrease from $507 million recorded in the corresponding period the previous year. For its most recent quarter, the bank’s wealth management and insurance segment saw an increase to $707 million from $621 million over the prior year’s comparable period. Additionally, TD’s wholesale banking unit achieved earnings of $419 million, marking an improvement from $361 million in the equivalent quarter of the preceding year.
The report from The Canadian Press was initially released on May 22, 2025.
Companies featured in this story include (TSX:TD)
Ian Bickis, The Canadian Press