Another layoff wave approaches
The hope not too long ago was that investment banking would rebound in 2012, an idea that perhaps moderated the layoff impulse at some banks.
But it appears as if banks are resigned to doing more with fewer bankers (and traders), not to mention support staff. According to the Boston Consulting Group, banks just might eliminate 12 percent of their workforce in the "short-term." Fortune puts it starkly: "After adding thousands bankers in the past two years, financial firms again appear to be on the verge of cutting that many positions and then some. Consultants and Wall Street recruiters say banks could eliminate nearly 21,000 jobs from their securities divisions in New York alone. Worldwide cuts could be even larger. Recruiters say big banks are in the process of finalizing their downsizing plans, and that layoffs could start soon."
It would appear that the layoff wave has already started. Bank of America, which has already wielded the axe on the consumer banking side, now has plans to get rid of 2,000 more positions in accord with Project New BAC, according to media reports. The layoffs will be felt acutely within Merrill Lynch, where 400 bankers are in line for pink slips.
Similar action will be seen at other banks, such as Credit Suisse. The timing is interesting in that first-quarter earnings were generally stronger than expected at the top banks. Certainly, the collective increase in revenue was welcome. In some cases, the layoffs were previously planned. But the axe-wielding perhaps also reflects the view that a massive surge in investment banking business is not forthcoming.
- here's the Fortune article