Wall Street has laid off thousands of employees in 2011 with some ailing firms making bigger cuts than others. Subject to new regulatory actions and enduring a lack of global enthusiasm for the equity markets, banks across the board are looking to cut costs. The moves are far reaching. The cuts in 2011 have been expansive enough to alert New York City officials, whose budgets rely on the typically lucrative financial sector. This year though, the cuts which have affected Banks from Morgan Stanley (MS) to Bank of America (BAC) and Citigroup (C) could cause a decline in personal income tax collection of as much as $200 million, negatively impacting government cash flow. Additionally, the weaker profits and fewer jobs will have a far reaching impact on real estate and retail this time of year, which typically gets a boost as Wall Street fat cats look to spend their bonuses. Such luxuries will surely still be enjoyed in the coming months, but on a lesser scale.
Many, particularly supporters of Occupy Wall Street, would argued these banks have finally gotten some comeuppance for their involvement in the financial crisis, which led so many Americans to lose their jobs in 2008. Others may be concerned about the potential impact the spending on the 1 percent may have on the rest of the economy.
For now, let’s just investigate the year in Wall Street Job Cuts.
Morgan Stanley (MS): The most recent of the pack to announce serious layoffs, the firm said it would shed 1,600 in the first quarter of 2012, roughly 2.6 percent of its total work force. Morgan said the losses would impact employees on every level and in all geographic areas. Morgan’s reasoning behind the declines could be traced back to the bank’s weakened investment bank revenues. In the third quarter Morgan’s IB revenues fell 29 percent to $451 million while underwriting revenues declined 44 percent to $212 million from a year ago.
Bank of America (BAC): The reasons why Bank of America, which seemed on the brink of collapse if not for a cash infusion of $5 billion from Berkshire Hathaway obvious. The Bank will shed the most jobs next year of any of its Wall Street competitors, around 30,000 by the end of 2012.
Citigroup (C)-Citigroup is a middle ground in term of cuts, with its place to reduce its work force by about 2 percent or 4,500. The layoff cost the bank close to a half a billion dollars in severance fees earlier in the year but the top executives are hoping it can translate to greater profitability in 2012. The streamlining seems necessary amid the trying times in the eurozone and the slowing of emerging economies.
Wells Fargo (WFG)– Wells Fargo announced earlier in the year its intention to cut technology and operations jobs by the end of year as part of its Project Compass program. The program intends to eliminate $1.5 billion of quarterly operating expenses.
UBS (UBS)– UBS announced its cuts alongside many other Wall Street firms, with an initial 1600 reduction being followed up by an additional 400 layoffs.
JP Morgan Chase (JPM)– The exact number of cuts at JP Morgan is difficult to pin down though they were largely focused in the banks mergers and acquisitions sector as well as among junior banks. Of all the financial firms, they seem to be ending the year in the best standing in terms of lay offs.
Goldman Sachs (GS) -The loathed investment firm announced plans to cut 1,000 jobs in July after a lackluster quarterly performance. With its worst year since 2008 and one of the few that the bank wasn’t profitable, Goldman is looking to reduce its costs by $1.2 billion next year.