After adding thousands bankers in the past two years, financial firms again appear to be on the verge of cutting that many positions and then some. Consultants and Wall Street recruiters say banks could eliminate nearly 21,000 jobs from their securities divisions in New York alone. Worldwide cuts could be even larger. Recruiters say big banks are in the process of finalizing their downsizing plans, and that layoffs could start soon.
The latest round of job cuts could rival those that happened during the financial crisis. Back then, which was less than four years ago, Wall Street eliminated 28,000 positions. But that round of downsizing included the collapse of Bear Stearns and Lehman Brothers, and the biggest crisis in the financial markets since the Great Depression. By comparison, the stock market is up this year, and just last week banks reported better than expected earnings for the first quarter. What’s more, at the same time large firms are firing, many smaller investment banks have been staffing up. As a result, overall employment on Wall Street might not drop as much as it did after the financial crisis.
via Fortune Mag.
First, just so everyone knows, the crisis in not over; we’re not out of the woods yet. It’s sad whenever anybody loses their job and there may be a lot more of this coming. Bankers, especially investment bankers, are especially susceptible. A story this week about how JP Morgan Chase lost $2 billion in their “synthetic credit portfolio” shows with what relative ease the wheels can fall off the bankers bus. Everyone who works in that industry is on the edge everyday.
Second, this is a fine example of the private sector doing something the public sector cannot — getting rid of unnecessary people. We know from the 2010 U.S. Census that Illinois while Illinois is growing its 3% rate over a decade is enemic compared to other states; we lost a U.S. House seat. Yet Illinois government continues to grow and grow and grow. We need to right-size Illinois government. Some agencies are actually understaffed; leaving taxpayers waiting for basis services. Others are bloated with staff getting paid to attend baseball games.