Wall Street firms are pruning their ranks right and left right now.
Finance layoffs are a big story – Meredith Whitney predicts 80,000 layoffs in the US financial industry (take that with a grain of salt) – and the numbers that have been reported to the media may be lower than reality, says a tipster who tells us that the huge quant fund DE Shaw actually laid off 25% of its employees, not 10% like we previously thought.
“The internal number is more like 25%. You can report that,” he told us, “say, ‘the mailroom guy says it’s 25%.'”
UPDATE: Another source close to DE Shaw refutes this story.
Previous reports said that on one day, DE Shaw fired 150 people. We also heard that the bottom 10% were cut from an investor with the fund who also said that the fund disproportionately cut employees who had been investing in the real estate sector.
Let’s read into this, even though we’re probably wrong. Maybe:
- 10% were laid off on one day, more were let go later
- 25% of non-admin staff were let go (lots of analysts and portfolio managers)
- 25% empty is just how it feels (the morale inside the firm is low)
For what it’s worth, we also heard from someone inside Bank of America that the firm’s layoffs were more like 15%, not just 5% of Capital Markets, like we previously heard.
“They cut like 15 per cent or something throughout the bank,” a former employee told us.
“People were cut in every group that I know people in, and at all levels too – analyst, associate, VP, Director and MD. They didn’t seem to spare analyts as is usually the case it seems.”
Of course layoffs aren’t unique to these two firms.
A couple of days ago, we were warned of upcoming layoffs at Citadel. And then yesterday Dow Jones reported that someone familiar with the matter at Citadel said, “there could be staffing changes as the firm is undertaking its annual business review.”
And then the Wall Street job massacre continued at Knight Capital, a capital markets firm in New Jersey, just a couple of days ago.