Two separate pieces of news hit the market. They did not appear to be directly related, but they do say that employment on Wall Street could drop much further this year.
According to The Wall Street Journal, Citigroup's (NYSE: C) "will dismiss thousands of investment-banking employees world-wide as part of a plan to cut the roughly 65,000-employee group by 10%." The FT reports, Goldman Sachs (NYSE: GS) "is now expected to cut up to 10 per cent of staff in the division that handles mergers and acquisition advice and corporate fundraisings."
Because Goldman is perceived as doing relative well in a tough financial environment, the news is particularly bad.
The information is another sign that the world of Wall Street is not turning around. If these companies saw a second half recovery, they might be less likely to cut so deeply.
But, it is part of a trend. After bottoming in March, U.S. financial stocks started to move back up at the end of Spring. There was talk that the credit crisis had seen its peak.
With new write-offs and thousand of people in the industry about to be out of work, it looks like the April rally was for suckers.
Douglas A. McIntyre is an editor at 247wallst.com.
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Reader Comments (Page 1 of 1)
6-24-2008 @ 2:46PM
sleepless in the Citi said...
Vic is just doing what he said he would on day one. Cut the jobs that don't need to be done, and shed underperforming units.
A good friend also told me that Schonfeld and co were all over Citi's board friday and through the weekend like a dog after a bone, but then left abruptly and sulked out the door like a doggie who didn't get his treat. Citi's up to something big, and they're not leaking it as usual. Anyone hear anything?