This fall has not been good for Wall Street jobs, and if some predictions are right, it’s only going to get worse.Let’s start with why this is happening. Meredith Whitney gives 5 reasons:
- There’s a state budget crisis
- Banks’ revenues are horrible right now
- Banks’ spending grew faster than their revenues
- Banks are over-staffed
- She predicts an ugly Case-Schiller number in October
You can see why Whitney predicts that the fourth quarter is going to be hell and that layoffs will begin in the first quarter.
Unfortunately, for many, the hell has already begun.
In early September, Meredith Whitney--the banking analyst turned Wall Street predictionist-- estimated that the financial industry would cut 80,000 jobs over an 18-month period.
Judging from the scale of recent companies' layoffs, Whitney's prediction might be on its way to becoming true.
You're about to see that eight major Wall Street firms are cutting jobs while others are implementing a hiring freeze or asking employees to find other jobs.
Goldman's New York proprietary trading desk has been acquired by private equity company Kohlberg Kravis Roberts & Co. On Sept. 3 Goldman told at least 65-70 prop traders to find new jobs as the bank increases efforts to diminish their prop trading units in light of new financial regulations.
As a side note, a hotel owned by Goldman Sachs is laying off 250 people, but the firm isn't making any cuts, necessarily.
Number of layoffs: 400 people, 10 per cent of staff.
Department: All levels, including partners and portfolio managers
Reason: The funds assets under management dropped by about half. (SOURCE US) And maybe - a failed New Mexico community that DE Shaw planned in 2006 and will put them in $100 million of debt.
Additional source: the Wall Street Journal
Many firms are still hiring everyone's least favourite trader. Guess who.