“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 during 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 now out of work because of the firm’s purchase by JPMorgan Chase & Co.—a transaction that was finalized May 23.
Additionally, firms including Citigroup, Merrill Lynch, UBS and Morgan Stanley have announced steep 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 percent this year, reports Renaissance Capital in Greenwich, Connecticut. M&A activity is off nearly 40 percent, according to Bloomberg data.
New York’s Independent Budget Office forecasts that 33,300 Wall Street jobs—17 percent of the city's best-paid workforce—will disappear by next year. The agency’s estimate, which reflects a 65 percent increase over the previous projection, approaches the 40,000 local jobs that were slashed when the technology bubble burst earlier this decade.
The cutbacks likely 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 percent of the city’s jobs but generated 23 percent of its wages in 2006, the office says.
Following is the announced cutbacks at securities firms—total worldwide followed by the estimated number in New York City:
Citigroup: 15,900; 3,000
Bear Stearns: 9,200; 7,000
UBS 7,000; 1,000
Lehman Bros.: 6,400; 2,000
Merrill Lynch: 5,200; 2,000
Morgan Stanley: 4,400; 2,000
JPMorgan 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
Filed by Aaron Elstein of Crain’s New York Business, a sister publication of Workforce Management. To comment, e-mail firstname.lastname@example.org.