22,000 Wall Street Job Cuts in 2008

22,000 jobs cut, with more to come
[full article]

 

In the past year, 22,000 New Yorkers who work on Wall Street have lost their jobs, according to a Crain's estimate. And far more blood-letting is to come.

 

"I'm afraid we're not even halfway through the wave of layoffs," says Jonathan Jones, president of Manhattan recruiting firm Jones Search Group. "It feels like a long, painful road ahead."

 

Data from the U.S. Bureau of Labor Statistics show that headcount on Wall Street was flat over the past 12 months. Data from private-sector analysts show that, on a seasonally adjusted basis, employment has declined by only 800 since the end of 2007.

 

But those figures clearly understate the damage.

 

For starters, they don't include the thousands of pink-slipped staffers who are still collecting severance. They also don't account for the approximately 7,000 Bear Stearns employees thrown out of work because of the firm's purchase by J.P. Morgan Chase & Co.—a transaction that was finalized last Friday.

Additionally, firms including Citigroup, Merrill Lynch, UBS and Morgan Stanley have announced stiff staff reductions in recent weeks. And significant layoffs have most likely occurred at the dozens of brokerages and investment firms that don't publicly report such figures.

 

Though cuts have been worst in such hard-hit areas as mortgages and structured finance, bankers in more traditional lines like initial public offerings and advising on corporate mergers and acquisitions now seem vulnerable. IPO volume is down nearly 70% this year, according to Renaissance Capital in Greenwich, Conn., and M&A activity is off nearly 40%, according to Bloomberg data.

 

The city's Independent Budget Office forecasts that 33,300 Wall Street jobs—17% of the city's best-paid workforce—will disappear by next year. The IBO estimate, which reflects a 65% increase over the previous projection, approaches the 40,000 local jobs that were slashed when the technology bubble burst earlier this decade.

 

The cutbacks will reverberate throughout New York's economy, because each Wall Street job creates two others—in everything from law and accounting to restaurants and bars—according to the state comptroller's office. Wall Street represented just 5% of the city's jobs but generated 23% of its wages in 2006, the office says.

 

THE TOTAL ON WALL STREET
Announced cutbacks at securities firms: total worldwide followed by estimated number in New York City

CITIGROUP 15,900; 3,000
BEAR STEARNS 9,200; 7,000
UBS 7,000; 1,000
LEHMAN BROTHERS 6,400; 2,000
MERRILL LYNCH 5,200; 2,000
MORGAN STANLEY 4,400; 2,000
J..P. MORGAN CHASE 4,100; 1,500
BANK OF AMERICA 3,700; 1,000
GOLDMAN SACHS 1,500; 500
WACHOVIA 1,400; 1,000
CREDIT SUISSE 1,300; 750
DEUTSCHE BANK 500; 250

 

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