Wall Street job losses the most savage since 1974 bear market

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Firms on Wall Street shed 43,300 jobs in the 12 months to February – ranging from backroom clerks to million-pound-a-year managing directors – as lousy investment banking conditions stifled trading. Carnage on such a scale has not been seen in New York for more than 25 years.

Firms on Wall Street shed 43,300 jobs in the 12 months to February – ranging from backroom clerks to million-pound-a-year managing directors – as lousy investment banking conditions stifled trading. Carnage on such a scale has not been seen in New York for more than 25 years.

The gloom continues to linger, in spite of signs of regained vigour in the US economy. Just this week, Credit Suisse First Boston revealed plans to dispose of 300 investment banking jobs. About 50 of those affected will be managing directors earning an average of $1.3m (£900,000) annually.

"This is one of the toughest job markets in over a decade," said Laura Lofaro, at the New York recruiting firm Sterling Resources International. "However, as is always the case, if you are a high performer and revenue producer you will find a new job in the industry."

CFSB has already slashed 2,500 positions from its payroll last autumn in its efforts, under the leadership of the company president John Mack, to tame costs. The bank is renowned for having the most generous pay packages on Wall Street. Merrill Lynch, the largest investment bank in the US, has made the deepest cuts, however, with a workforce that is now lighter by 9,000 people.

The lay-offs on Wall Street in the year through February were the most savage since the bear market of 1974, Bloomberg reported last night, citing US Labor Department statistics. They leave New York with 170,000 jobs in the securities industry, down 11 per cent from a year earlier.

The shrinking presence of Wall Street in the city is not just about job cuts, however. After last year's terror attack on the World Trade Centre, several banks began to transfer workers to satellite offices in suburbs in New Jersey and Connecticut.

There may be still more pain to come. Among other firms expected to look for further cuts in the weeks to come are Goldman Sachs, JP Morgan and Salomon Smith Barney. The three firms could decide to send hundreds more bankers onto the street.

Only a sharp pick-up in banking activity in the coming months will reverse the dismal trend. Merger activity on Wall Street was down by more than two-thirds in the last quarter from a year earlier to $313bn. Stock sales are also down heavily.

Goldman Sachs has already indicated that it expects to reduce its headcount once again by about 5 per cent, which would translate into another 1,100 of its employees finding themselves without work.

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