Board-Ansicht
Mix-Ansicht- 43.000 Jobs an der Wall Street verdampft, 25-Jahres-Hoch - Hirscherl, 04.04.2002, 13:59
43.000 Jobs an der Wall Street verdampft, 25-Jahres-Hoch
New York, April 3 (Bloomberg) -- Wall Street shed 43,300 jobs in the year ending in February, marking the biggest cuts in more than 25 years. The firing spree may not be over.
Credit Suisse First Boston's John Mack, Goldman Sachs Group Inc.'s Henry Paulson and other chief executives of securities firms are finding they still have too many employees given that mergers plunged by two thirds last quarter and stock sales slumped 15 percent, corporate recruiters say.
``Every firm has a list for the next wave,'' said Henry Higdon, chairman of New York-based recruiting firm Higdon Group.
Merrill Lynch & Co. has cut the most jobs, shedding about 9,000 positions in the fourth quarter, while Morgan Stanley Dean Witter & Co. eliminated 3,800 jobs in the year ending in February. More cuts have occurred since then. Credit Suisse First Boston said yesterday it fired 300 investment bankers. Goldman Sachs Group Inc. last month said more layoffs are coming.
The job cuts in the year through February are the biggest in the industry since 1974, according to the Department of Labor, leaving total U.S. securities industry employment at 733,100.
New York City had about 170,000 securities industry jobs at the end of February, 11 percent fewer than just six months earlier. Thousands of jobs have migrated to New Jersey, to Westchester County or Connecticut after the Sept. 11 terrorist attacks.
New York state's share of securities industry jobs is at a record low of 25 percent, according to the department.
The latest round of cuts includes more managing directors, who make an average of $1.3 million annually.
``This is not just laying off the entry-level folks, the people just out of business school or undergrad,'' Salil Mehta, managing director at Second Curve Capital LLC, which invests $250 million in financial stocks. ``They are starting to lay off managing directors.''
Rebound Ahead?
Executives at securities firms say mergers and stock sales probably will rebound in the second half of the year. Shares of securities firms have rallied on the expectation that a recovery in business and lower compensation costs will lift profits later in 2002.
Still, until there's evidence that the rebound has arrived, firms will plan for further cuts, Higdon and others say.
Goldman, the third-biggest securities firm by capital, cut 541 jobs last quarter, and Chief Financial Officer David Viniar said in March further job cuts in the ``mid-single digits'' on a percentage basis were likely. A 5 percent cut would mean 1,100 more positions eliminated. Goldman has posted six straight declines in profit.
Credit Suisse First Boston's parent, Credit Suisse Group, had a first-quarter loss and its shares are down 16 percent this year, compared with a 2.9 percent gain for the Dow Jones Industrial Average.
Merrill Lynch, the biggest securities firm by capital, has been rewarded by investors for cutting costs. The company's shares are up 4.4 percent this year, beating Morgan Stanley Dean Witter & Co.'s 1.5 percent rise and the 5.6 percent decline in Goldman shares. Merrill is a passive, minority investor in Bloomberg LP, the parent of Bloomberg News.
Merrill reports its results on a calendar year. Its first- quarter earnings will be published around April 18.
Most Wall Street firms are reeling because the clients they rely on for fees are struggling to recover from a recession and fallout from the collapse of Enron Corp.
Senior Ranks
Credit Suisse First Boston's cuts, announced in a memo to the division yesterday, include as many as 50 managing directors, the largest reduction to the firm's senior ranks since Mack took over in July.
Managing directors on Wall Street last year earned a minimum of $900,000 and an average of $1.3 million, according to a survey by Investment Dealers' Digest.
``Everybody hoped business would turn around,'' said Andrea de Cholnoky, co-head of the investment banking practice at Spencer Stuart, a recruiting firm in New York. ``Now many aren't so optimistic.''
During the fiscal first quarter, a drop in merger activity and debt sales more than offset a revival in U.S. stock offerings, reducing fees.
``Equity issuance and M&A have to significantly improve over the next few months or I think the Street could trim headcount more,'' said Lauren Smith, an analyst at Keefe, Bruyette & Woods Inc. in New York.
Completed mergers fell 68 percent from a year earlier to $313 billion; announced mergers, at $269.4 billion, were lower than both the prior and year-earlier quarters. Investment banks generally get paid for their mergers advice when transactions are completed.
Stock sales globally fell 15 percent to $57.8 billion from a year ago. U.S. companies, though, sold about $26 billion of shares in the U.S. in the three months ended Feb. 28, up 45 percent from the year-earlier period and 26 percent from the fiscal fourth quarter, Bloomberg data show.
That may continue. Corporate debt sales, which set records in 2001 as benchmark interest rates fell, declined in the quarter as yields climbed on expectation the Federal Reserve may boost rates this year.
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