Traders and investment bankers might have more to worry about than dwindling bonus pools this year as mass firings on Wall Street are set to hit a record.
The fallout from this year's global credit crisis has claimed jobs on all corners of Wall Street, from hedge fund managers to floor traders and beyond. More than 110,000 have lost their jobs so far this year, and some industry experts forecast it could come close to 200,000 before the year is over. Even the financial industry's biggest name isn't immune. Goldman Sachs Group Inc, the world's biggest investment bank, made plans on Thursday to cut 3,200 positions from its staff of 32,000. Barclays Capital is in the midst of purging 3,000 jobs as part of its takeover of Lehman Brothers, and Bank of America Corp's acquisition of Merrill Lynch & Co is sure to add thousands more. Major US financial companies are getting rid of redundancies caused by this year's rapid-fire consolidation. They are also adapting to an environment of more regulation, less risk, and dwindling profits. ``Wall Street the way we know it is frankly gone,'' said Dr Michael Williams, dean of the graduate school of business at Touro College in New York. ``This was inevitable because there's just not enough money out there to support the huge staffs these banks and investment banks had before.'' Williams and other analysts believe this next wave of cutbacks will be the biggest the American financial industry has faced since massive bank failures in the 1930s. He believes up to 250,000 financial workers, perhaps even more, could find themselves out of work by the second quarter of next year. US financial services companies have cut 111,201 positions through September, on top of 153,105 made last year, according to Chicago-based outplacement firm Challenger, Gray & Christmas. The Securities Industry and Financial Markets Association said there are currently 867,400 people employed by their members that include securities firms, brokerages, stock exchanges, and banks. John Challenger, chief executive of Challenger, Gray & Christmas, said layoffs will surge in the next few months as companies begin to position themselves for 2009. In addition, cutting employees before the year's end in some cases eliminates hefty bonus payments. ``There's been heavy layoffs already, but until you see events start to slow down, we're not out of the woods,'' he said. ``These companies, even the very best of them like Goldman, are subject to the conditions of much lower activity and much less revenue.'' For the two surviving stand-alone investment banks, Golman Sachs and Morgan Stanley, the business environment might slow as they reshape themselves into companies that more closely resemble retail banks. That means they'll be more regulated, with greater limits on their ability to take risk. There also remains uncertainty about how many banks might fail, even with the government's various bailouts. Banks that have heavy exposure to toxic mortgage investments and other risky bets might collapse or be acquired by healthier banks, in the next year. Washington Mutual Corp, the Washington-based thrift, is in the process of unloading its retail branches to JPMorgan Chase & Co, and Wachovia Corp is selling its retail network to Wells Fargo & Co. The number of jobs lost is still unknown from those transactions. BofA's acquisition of Merrill Lynch could result in thousands of lost jobs, especially in areas like technology, operations and finance. Both sides are still attempting to map out where the cuts will come from, and there were reports this week that Merrill had already sent pink slips to 500 or more traders in New York. http://economictimes.indiatimes.com/articleshow/msid-3637302,flstry-1.cms To keep a lamp burning, we have to keep putting oil in it --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Kences1" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/kences1?hl=en -~----------~----~----~----~------~----~------~--~---
