If you work on Wall Street, your days of gainful employment may be numbered. Job security on Wall Street is fast becoming a thing of the past. Josh Fineman and Deirdre Bolton of Bloomberg.com reported today that executive recruiters claim that the world’s biggest financial firms may cut as many as 175,000 jobs by this time next year. These firms have already announced cuts of more than 83,000 jobs since July 2007, and recruiters fear that the job losses will exceed those from the technology collapse market slump of 2000 ? 2003.
Firms have incurred write-downs of almost $400 billion because of mortgage defaults. Write-downs of this magnitude mean correspondingly large job losses, especially on Wall Street, which has a tendency to over-hire in up markets and over-fire in down markets.
Citigroup has announced cuts of more than 13,000 jobs or 4% of its work force. It also has plans to shrink the trading and investment banking divisions by 10 %. Bear Stearns cut more than 9,000 jobs or 66% of its work force as it was acquired by JPMorgan Chase. UBS had announced 7,000 job cuts, and Lehman Brothers has cut 6,3000 employees.
New York is being especially hard hit by these job cuts. According to the Bureau of Labor Statistics, New York lost 17% of its banking and securities jobs from 2000 to 2003. Gary Goldstein, chairman of the financial recruiter Whitney Group, predicts that the current job cuts may eventually claim 35% to 40% of financial jobs.
Goldstein observed, “They just keep chopping heads. They’ll wake up one day and realize that they’ve cut too deep and now these business have come back and they don’t have anybody to do them.”
The contraction is worldwide. London is expected to lose 19,225 finance jobs in 2008 and 2009 or 5.4% of the total. It only lost 15,340 jobs or 4.7% from 2000 to 2002.
These jobs are going away. And it will be long time ? if ever ? until they return. As we pointed out in our earlier post, employees at financial firms must take steps now to protect themselves.
Page Perry is an Atlanta-based law firm with over 125 years collective experience representing executives and other securities professionals in employment disputes with their employers. For further information, please contact us.