Major US banks on Wall Street are preparing for a wave of layoffs and job cuts that will be the largest since the global financial crisis that hit the banking sector in late 2008.
A report published by the British newspaper “Financial Times”, seen by Al-Arabiya.net, said that CEOs on “Wall Street” are heading to a wave of job cuts in order to get rid of the wave of employment that began with the recovery of the economy in the wake of the “Corona” Pandemic.
According to the report, bank job cuts are expected to exceed 11,000, as Wall Street grapples with the worst job market since the financial crisis in the wake of the post-pandemic hiring period.
Citigroup this week became the latest major US bank to announce significant job cuts, telling investors it plans to cut 5,000 redundant jobs by the end of the second quarter of this year, mostly in investment banking and trading.
Citigroup’s announcement comes on the heels of cuts that affected thousands of bankers at Goldman Sachs and Morgan Stanley, and these cuts also come at a time when executives are trying to get rid of the wave of hiring that began with the recovery of the economy in the wake of the “Corona” Pandemic. When banks dramatically increased their staff to handle the boom in deals and trading.
“This is probably one of the most challenging job markets we’ve seen since the 2008 financial crisis,” said Max Chemnitzer, managing director of banking and financial services at staffing firm Michael Page in New York.
“When you look at metrics like the number of jobs coming in, converting resumes that turn into interviews and those interviews turning into offers, those numbers are the slowest we’ve seen in a long time,” he added.
The Financial Times says the tight labor market during and after the pandemic prompted companies to offer generous payments to employees. Until the end of the first quarter of this year, the five major banks on Wall Street were still clinging to their employees, with the exception of Goldman Sachs, which announced a 6.4% cut in its employees, to become 45,400, which is the largest drop in jobs in years.
In 2022, employment in the New York securities industry jumped nearly 6%, the largest increase in 20 years.
“Last year the hiring has been insane,” said Jane Branthofer, head of financial services recruitment at DHR Global. “Many companies have told me we don’t just hire because we’re busy, we hire and retain the best talent to stay competitive.”
“That trend has been reversed this year, with managers being told there has to be a very specific reason for making the hire. Now even though someone is out it doesn’t mean they get approved to hire a replacement,” Pranthofer added.