Wall St. Bracing for Heavy Layoffs

Financial forecaster Meredith Whitney expects Wall Street to see massive layoffs in the coming months. She states that firms will be seeing up to 80,000 job losses, a number that translates to 10% of the current payrolls. She also says that increasing costs coupled with lower revenues will act like a catalyst, hurrying the process of layoffs along. A rough timeline of events that she gives is "dramatically" reduced pay by the year's end followed by a bevy of layoffs in 2011. Given what we learned about Wall Street employees and tall buildings during the Great Depression in history class, we hope that this news doesn't boost these stats.

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By Bilal Khan in News on September 8, 2010 12:21 PM

Comments [rss]

agdave

This is a simple volume issue.

http://www.nypost.com/p/news/business/trading_trauma_pfKmeFIbH3j46RuBXRTUpL

Has absolutely nothing to do with taxes or health care. You can easily check this yourself if you don't believe me. Simply pull up the 10k or 10q report of your favorite (or least favorite -- based upon the tone of most folks here) bank.

agdave

Volume...volume...volume

http://www.nypost.com/p/news/business/trading_trauma_pfKmeFIbH3j46RuBXRTUpL

On the investment banking side, banks are having to spend a lot more money per trade than ever. It's all about volume, as the last quarter was at historic lows (basic supply and demand economics).

Has absolutely nothing to do with taxes or health care costs...there is not material movement in health care and/or taxes at all (if you don't believe me, pull for yourself the 10-k and/or 10-q of your favorite or based upon responses written here, your least favorite bank).

Dogsbody

Well at least the MTA is hiring...

hellogreg

Good riddance. Maybe this segment of our workforce can eventually learn how to do something productive and meaningful.

JacqueMehoff

I think this is the first time I've seen a post on unemployment numbers/layoffs get more than 10 comments.

Kelles

I'm figgerin' it were them Rocky Mountain Oysters what did it...

Ed1

Like it or not, NY needs the financial industry and those high paying jobs (and the countless jobs they create in various services - from law firms to caterers). People in this city that are yelling "burn Wall St." will feel like the UAW guys who in the 70's and 80's saw themselves at war with the Big Three - you'll miss your industry when it's gone.

I can see the argument that Wall St. acted recklessly and greedily in the last 10 (100?) years, but as New Yorkers, we've benefitted. Just recognize it.

philosophy

Sorry, but I don't think we should accept some sort of service to the rich as a positive job prospect.

BDS=(Boycott.Divest.Sanction)

for sure...but lets reconize that NYC has been hurt 1K times worse by Wall St moving Operations to Jersey City or worse still, India....than any supposed 'govt' regulation.

http://www.businessweek.com/globalbiz/content/mar2009/gb2009039_431274.htm?chan=top+news_top+news+index+-+temp_global+business

jles

Isn't Obama mulling raising the capital gains tax? Does the healthcare bill that was just passed not add an additional cost of doing business for employers because they now must insure all of their employees or pay a fine? Was there not just a financial regulation bill passed that puts greater barriers towards banks profitability?... This all raises the cost of business and forces people to lay off extraneous workers.

And, why would the fact that CEOs make a lot of money incentivize them to fire people? They obviously like making money...so, wouldn't it be in their benefit to hire as many people as profitably possible, who can make them as much money as possible, and they would be richer? I don't follow your argument.

The rapidly rising cost of business seems like a far more justifiable reason to fire people.

BDS=(Boycott.Divest.Sanction)

free information for you.

the taxes which are not even in effect yet, are not aimed at corporations but individuals. coporations pay a small share of revenue collected by the govt...something like 15-17%...

the taxes which are not even passed yet are hardly even new or extreme taxes...they are the reinstatment of deficit causing tax cuts that bush put in place...again on income it will only apply to the top 2% of earners...

likewise by their nature, capital gains and dividends target the very wealthy...the are returning but will be at an even lower than historic rate. from 15 to 20% on capital gains and20% on dividends. This will only apply to people making more than 250K.

banks will not have to pay for the new healthcare reform bill. if you have specific concerns, list them.

likewise you say the financial regulation bill the 'puts greater barriers towards banks profitability' boo fcking hoo...but seriously SPECIFICALLY what dont you like about it. The govt did bail out the banks to the tune of a trillion dollars, call me a commie but I think some regulation is in order.

lastly, the CEO pay is illustrative of the crazy country we live in. The notion that the govt should give free reign to corporations and they'll spread around the wealth and create jobs is bs. its as much bs as the the myth that rich people will trickle down or sh*t gold coins for the poor people to use.

but whatever....you want to celebrate Lax govt control of corporations, by all means, go ahead...

http://www.economyinperspective.com/

unretrofiedforu

"They obviously like making money...so, wouldn't it be in their benefit to hire as many people as profitably possible, who can make them as much money as possible, and they would be richer?"

Are you at least a VP or something similar? Yeah; didn't think so.

jles

No, I'm not. What, on earth, is your point?

hotstepper

open up Wall Street, its time to taste your own medicine.

Ishtar

Don't most banks get rid of about 10% of their staff every year and bring on roughly the same precentage of fresh faced money grubbers to burn out?

jles

How is this a surprise to anyone?

When you raise the cost of doing business (increased taxes, expanding health insurance benefits) and create barriers to allowing firms from generating revenue (financial reform bill, raising capital gains tax) employers have to lower costs by firing employees. This applies to more businesses than wall street.

This is exactly why Obama's approval rating is down. He keeps touting his "recovery" efforts, and his efforts to create jobs, then deliberately undermines the profitability of businesses. Just to clarify, businesses hire people. I really wanted to believe in Obama, but his ideas just make no sense.

BDS=(Boycott.Divest.Sanction)

to blame Obama for this is bogus

specifically what has Obama done to

increase taxes?

expand health insurance benefits?

that would lead to wall st companies laying off thousands of employees?

nothing.

the bush tax cuts for capital gains and dividends havent even expired yet...for income they apply to the top 2% of the individuals.

the only new taxes from the healthcare reform bill will be paid by insurers, drug makers.

Here's a better theory of why US banks are quick to layoff workers...look at this nice chart about bank pay around the world. Note, the compensation of the CEOs of the largest U.S. banks towers above what’s paid to banking chiefs in other parts of the world.

http://www.ritholtz.com/blog/2010/02/banking-compensation-around-the-world/

jles

I responded to you below

Kojak

No, just of the financial industry as they did help trigger the recession with unabashed gluttony at the expense of the lower middle class.

It could've been worse. The administration could've taken a much harder line.