Financial Firms May Make Deeper Cuts, Eliminate 175,000 Jobs

[marmar]

from Bloomberg:



Financial Firms May Make Deeper Cuts, Eliminate 175,000 Jobs

By Josh Fineman and Deirdre Bolton

June 24 (Bloomberg) -- The world's biggest financial firms may lose as many as 175,000 jobs by this time next year as Citigroup Inc. and other banks shed workers amid slowing revenue and billions in writedowns, executive recruiters say.

Financial companies have announced plans to trim more than 83,000 jobs since last July, according to figures compiled by Bloomberg. As more employees are fired, workforce reductions may exceed those from the market slump of 2000 to 2003 when technology-related shares collapsed, recruiters said.

``The worst is yet to come,'' Russ Gerson, head of New York- based recruiting firm Gerson Group, said yesterday in an interview. ``We are going to have a major contraction. This is affecting all areas of the investment banking universe and it's affecting all areas globally.''

Mortgage defaults have caused firms to incur almost $400 billion of writedowns and losses. New York-based Citigroup, the biggest U.S. bank by assets, has announced more than 13,000 job cuts, about 4 percent of its worldwide workforce. It may shrink further under a plan to trim the trading and investment-banking divisions by 10 percent, said a person with knowledge of the matter.

``For financial services this is about as bad as I can remember,'' John Challenger, chief executive officer of Chicago- based outplacement firm Challenger, Gray & Christmas Inc., said in a phone interview. ``The deal flow is not there. You just don't need as many people.''

Companies have announced more than $1.5 trillion of merger and acquisition deals this year, a 33 percent drop from the same period in 2007, according to data compiled by Bloomberg.

`Chopping Heads'

About 17 percent of banking and securities jobs in New York were wiped out from 2000 to 2003, the Bureau of Labor Statistics said. The current round of cuts may claim 35 percent to 40 percent of the industry, said Gary Goldstein, chairman of New York-based financial recruitment firm Whitney Group.

``They just keep chopping heads,'' Goldstein said. ``They'll wake up one day and realize that they've cut too deep and now these businesses have come back and they don't have anybody to do them.'' .........(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=a9D9UjMULF4o&refer=home

[gasperc]

1. I wonder how many have citicorp mortgages?

I wonder if they were selected that way? Or did they target for layoff employees with mortgages of thier chief rival? Unregulated capitalism is so ruthless.

[Ian David]

2. If tax cuts for the wealthiest 1/2 of 1% were REALLY going to "trickle-down" to anyone...

... wouldn't the people getting paid to take care of rich peoples' money be the first to benefit?

Considering that their job is to invest all the money that rich people aren't spending on taxes.