Credit Suisse has plenty of company in its cost-cutting campaign. HSBC, Barclays PLC, Goldman Sachs Group Inc and Bank of New York Mellon Corp have announced plans to ax thousands of workers in recent months. On Thursday, Bank of America Corp Chief Executive Brian Moynihan sent a memo to senior executives outlining plans to cut another 3,500 jobs.
The planned cuts at Bank of America have pushed the number of financial sector layoffs this year to 18,252 -- 6 percent higher than in the comparable period in 2010, according to Challenger, Gray & Christmas, an outplacement firm that keeps a daily tab on layoff announcements.
Some companies began the culling earlier this year -- HSBC has already axed about 5,000 employees, with 25,000 more set to get pink slips by the end of 2012 -- and others, such as Goldman Sachs, said that cuts will come by year's end.
That is not good for morale.
BITING INTO CLIENT SERVICE
Hours have become longer, trading floors have more open seats and fresh young faces are taking over offices where high-level personnel once sat. The highest-paid people can be easy targets for layoffs now, given the cost of keeping them employed and the eagerness of younger workers to take on their roles, even at less pay, executive recruiters said.
Banks that used to pay modest base salaries supplemented by opulent stock-and-option packages that encouraged meeting short-term performance goals now are weighting compensation toward base salary.
Managing directors at investment banks have seen a typical base salary double to $400,000, said Paul Sorbera, president of Alliance Consulting. Meanwhile, 2011 bonuses are expected to fall by up to 30 percent for top earners, according to pay consulting firm Johnson Associates.
The shift erodes Wall Street's former flexibility to lower end-of-year bonuses in bad times and forces a heavier reliance on layoffs.
IT A SOCIALIST DOUBLE-WHAMMY:
DODD-FRANK IS EXACERBATING A BAD SITUATION CAUSED BY OBAMA'S FAILED ECONOMIC POLICIES.
THESE PROBLEMS CAN'T BE TRULY FIXED UNTIL WE ELECT A GOP SENATE AND WHITE HOUSE.
THE ONLY SHIRT-TERM BAND-AID MIGHT BE IF OBAMA RESIGNED.
I AM PRAYING HE DOES - AND ANNOUNCES IT IN HIS SEPTEMBER JOBS SPEECH.
OBAMA'S RESIGNATION WOULD BE THE BEST MEDICINE THE US ECONOMY HAS HAD SINCE THE REAGAN TAX CUTS!