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WHAT'S NEWSWall Street Cuts Pick Up
Slashed This Year;
More Lehman Pain?
May 10, 2008
Wall Street's downsizing is picking up steam, and for employees at banks and securities firms it feels like death by a thousand cuts.
The global financial crisis is increasingly claiming jobs as the stock market struggles, financial firms retreat from risky businesses and deal-making remains slow. More than 23,000 financial-related U.S. job cuts were announced last month, according to outplacement firm Challenger, Gray & Christmas Inc. That increased the total to 49,825 in the first four months of this year -- nearly as many job cuts as were announced for all of 2007.
In the U.S., Wall Street's employment losses are concentrated in New York, where one in every five securities-industry jobs is based. Layoffs also are deepening in London, Hong Kong and other financial hubs. Lehman Brothers Holdings Inc., based in New York, is expected to announce next week that it is eliminating about 5% of its employees, or about 1,425 positions, on top of a previously announced 5% cutback in Lehman's work force. A Lehman spokeswoman declined to comment.
![[Wall Street Stop chart and photo]](http://s.wsj.net/public/resources/images/MI-AQ330_Jobs_20080509185255.gif)
By the end of June, Morgan Stanley plans 1,500 more job cuts, falling largely in the U.S. and hitting all businesses except global wealth management. No brokers will lose their jobs, but the latest downsizing puts total layoffs at Morgan Stanley at about 4,500 people, or 10%.
The firm is "constantly evaluating business conditions to ensure we are right-sized for the environment," a Morgan Stanley spokeswoman said.
The misery began last fall, as write-offs related to subprime mortgages spread and lenders tightened up on all kinds of credit, ultimately reducing merger and stock-trading activity and, in turn, meaning fewer workers on Wall Street.
UBS AG announced on Monday that it plans to shed 5,500 employees, including 2,600 investment bankers, with New York and London bearing the brunt.
In Asia, many major banks began shrinking the size of their staffs in April.
Employees who survive expect smaller bonuses. Meanwhile, skirmishes between firms and ex-employees are spreading.
Jeffrey Liddle, an attorney in New York, says he filed an arbitration claim this week on behalf of a former mortgage-backed securities salesman at Merrill Lynch & Co. Despite having his best year ever, the salesman's pay plummeted to about $190,000 from $1.2 million.
"He couldn't make enough money to feed his family," Mr. Liddle says. The employee asked to be laid off, so he could receive a severance package. Merrill Lynch declined, so the salesman quit and took a job as a stockbroker at another firm. A Merrill spokesman declined to comment.
Write to Ianthe Jeanne Dugan at ianthe.dugan@wsj.com
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