Just the start of the next round of layoffs ?
Wall Street’s cost cutting and layoffs, which have helped erase more than 300,000 financial-industry jobs in the past two years, are far from over.
Bloomberg reports that Citigroup’s announcement Tuesday of plans to eliminate 11,000 positions in units spanning equities trading to consumer banking is the latest sign of strain from a market slowdown, stiffer capital rules and weak economic growth. Lenders around the globe are likely to trim more jobs if revenue doesn’t rebound sharply next year, analysts and recruiters said.
'The knives are sharpened and ready', said Jason Kennedy, CEO of London-based search firm Kennedy Group. 'These institutions are too big for the business they are generating but they are still quite bullish that the market will return by mid-2013. Unless the markets picks up, there will be more cuts in the first half'.
Bank of America Corp. and HSBC Holdings Plc (HSBA) said last year they would cut 30,000 jobs, and UBS AG (UBSN) announced in October that it would fire 10,000 workers and largely exit fixed-income trading. Banks are under pressure to cut costs as they earn returns on equity that are lower than their cost of capital.
Cuts may continue as executives look to boost stock valuations amid poor revenue growth in capital-markets businesses. Investment-banking and trading revenue at the 10 largest global firms may climb 2.8% this year to $148bn, 32% below 2009 and 13% below 2010, according to data from industry analytics firm Coalition Ltd.
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