Wall Street prepares for more layoffs
Big banks are unlikely to be broken up -- but they will keep getting smaller by getting rid of a large numbers of workers.
Wall Street financial firms cut more than 75,000 people in 2011, and their employees are bracing for another round of layoffs. Analysts estimate that Wall Street banks will have roughly 10% to 15% fewer employees in early 2013 than they did at the start of 2012.
"Firms believe that their costs are way too high," said Alan Johnson, CEO of compensation consulting firm Johnson Associates. "I tell my clients we're not in a recovery. We're in a struggle."
With interest rates near all-time lows and growth slowing in the global economy, banks are having trouble finding new sources of revenue. That means the banks will probably once again look to pink slips to preserve their profits.
"The problem is that as fast as these banks cut jobs, the revenue goes down even further," said Christopher Wheeler, a bank analyst at the research firm Mediobanco.