Wall Street To Cut 21,000 Jobs In Biggest Purge Since Recession

Wall Street is earning profits at the moment but that doesn’t mean jobs on the famous financial exchanges of New York are safe as Wall Street recruiters announced this week that “job creators” will be slashing 21,000 jobs from the securities divisions alone. Analysts predict that worldwide cuts will be even larger as big banks continue to finalize their downsizing plans with layoffs starting soon.

To put those numbers in perspective, the collapse of big banks in 2008 resulted in 28,000 positions being lost, however many of those jobs came from the collapse of Bear Stearns and Lehman Brothers who helped create the greatest financial jobs loss since the Great Depression.

Even while many banks have been reporting better than expected earnings the general feel on Wall Street is that the banks are over staffed and can cut their bottom line without suffering financial losses. In fact the Boston Consulting Group says banks believe they can cut 12% of their overall workforce in the “short-term” and still operate with increasing profits.

As Fortune explains it:

“Perhaps the biggest problem at the banks is that they didn’t cut enough jobs last time around. Mergers and acquisition activity also has not bounced back as expected, leaving a number of high paid bankers idle. What’s more, new regulations appear to already be significantly curtailing the banks’ trading operations. Also weighing on the banks is the fact that debt watchers Moody’s and Standard & Poors say they are likely to soon downgrade the bond ratings of the firms. The nation’s five largest banks have estimated that the downgrades could cost them $22 billion in additional costs or collateral requirements.”

Unlike the first round of layoffs some analysts believe top level officials could also be shown the door as the cost front has not helped create the type of record profits banks have hoped to receive. For top level managers who do not see layoffs they could witness compensation cuts by as much as 30%.

Leading the layoff charge analysts believe Credit Suisse will let go as many as 3,500 workers however those job losses will occur across various layers of the bank and not just its Wall Street business with 2,000 of those jobs already gone and more to come from the firm’s investment bank.

Also expected to make big cuts are Bank of America and Barclays.