Job cuts seen at securities firms
Securities firms around the world will cut as many as 80,000 jobs in the next 18 months as revenue growth begins to slow, said Meredith Whitney, the former Oppenheimer & Co. analyst who famously predicted in 2007 that Citigroup Inc. was undercapitalized.
Securities firms around the world will cut as many as 80,000 jobs in the next 18 months as revenue growth begins to slow, said Meredith Whitney, the former Oppenheimer & Co. analyst who famously predicted in 2007 that Citigroup Inc. was undercapitalized.
The reductions, about 10% of current levels, will come after 2010 compensation payments, she wrote in a recent report. The industry’s payouts will be “down dramatically,” wrote Ms. Whitney, who started Meredith Whitney Group after correctly predicting the crisis at Citi.
Barclays PLC, Credit Suisse Group AG and Royal Bank of Scotland Group PLC may slow hiring in Europe as the fixed-income trading boom fizzles out, recruiters said last month. Barclays Capital’s income from trading bonds and commodities fell 40% in the first half amid the sovereign-debt crisis.
Fixed-income, currency and commodities trading were the biggest revenue contributors at investment banks from Deutsche Bank AG to The Goldman Sachs Group Inc.
Although regulatory reform, including higher capital requirements, will force some of these shifts, there will be a “deeper secular change” due to declining revenue in businesses such as securitization, Ms. Whitney reported.
Banks around the world cut 330,000 jobs during the latest financial crisis, according to data compiled by Bloomberg. Some have added employees recently as markets recovered.
Even though emerging markets will continue to expand, they won’t do so fast enough to offset the declines in Europe and the United States, Ms. Whitney wrote.
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