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Wall St. layoffs may top 200,000

More than 110,000 jobs have been cut this year, and many more trims are expected.

October 24, 2008|The Associated Press

NEW YORK — Traders and investment bankers might have more to worry about than dwindling bonus pools this year as mass firings on Wall Street are set to hit a record.

The fallout from this year's global credit crisis has claimed jobs throughout Wall Street, from hedge fund managers to floor traders and beyond. More than 110,000 people have lost their jobs so far this year, and some industry experts forecast it could come close to 200,000 before the year is over.

Even the financial industry's biggest name isn't immune. Goldman Sachs Group Inc., the world's biggest investment bank, made plans Thursday to cut 3,200 positions from its staff of 32,000. Barclays Capital is in the midst of purging 3,000 jobs as part of its takeover of Lehman Bros., and Bank of America Corp.'s acquisition of Merrill Lynch & Co. is sure to add thousands more.

Major U.S. financial companies are getting rid of redundancies caused by this year's rapid-fire consolidation. They are also adapting to an environment of more regulation, less risk and dwindling profits.

"Wall Street the way we know it is, frankly, gone," said Michael Williams, dean of the graduate school of business at Touro College in New York. "This was inevitable because there's just not enough money out there to support the huge staffs these banks and investment banks had before."

Williams and other analysts believe this next wave of cutbacks will be the biggest the U.S. financial industry has faced since massive bank failures in the 1930s.

He believes up to 250,000 financial workers -- perhaps even more -- could find themselves out of work by the second quarter of next year.

U.S. financial services companies have cut 111,201 positions through September, on top of 153,105 made last year, according to Chicago-based outplacement firm Challenger, Gray & Christmas. The Securities Industry and Financial Markets Assn. said there were currently 867,400 people employed by their members, which include securities firms, brokerages, stock exchanges and banks.

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