FINANCIAL JOB CUTS UP 21%; MORE EXPECTED ON WALL STREET IN COMING WEEKS
Wall Street bankers are bracing themselves for what could be a painful round of layoffs, as a combination of falling profits and increased compensation costs make it necessary for firms to dramatically cut expenses. In addition to Wall Street’s woes, the banking sector could see increased layoffs resulting from an uptick in merger activity. Yesterday, PNC Financial Services acquired the U.S.operations of Royal Bank of Canada. While PNC expects layoffs to be minimal, some job cuts will undoubtedly be necessary as duplicate job functions are eliminated. Planned job cuts in the financial sector are already up 21 percent this year, according to tracking by Challenger, Gray & Christmas. Through May, firms announced plans to eliminate 11,413 positions, compared to 9,431 during the same period a year ago. The financial sector announced less than 24,000 job cuts in all of 2010, making it the lowest job-cut year for the sector since 1996, when announced layoffs in the sector totaled 21,506. Are the financial sector job cuts indicative of bigger fault lines in the recovery or is it just another bump in the road? How might Wall Street layoffs impact other sectors of the New York economy?