JOBS MELTDOWN HITS THE STREET
By PAUL THARP
October 4, 2007 -- Wall Street's bloodbath has arrived in earnest with jobs cuts soaring nearly four-fold this year to more than 130,000.
Analysts blame the housing recession for about half those jobs, with Bear Stearns becoming the latest victim yesterday by firing 310 employees in its mortgage operations.
Bear Stearns is also folding together its Encore Credit and Bear Stearns Residential Mortgage units, where total payrolls have been slashed this year by about 40 percent.
Bear Stearns' latest cuts followed a string of layoffs at Wall Street's giants including Morgan Stanley, Lehman Brothers, Merrill Lynch and Credit Suisse totaling nearly 4,000 since the summer, many in the firms' mortgage operations.
A report yesterday by Challenger, Gray & Christmas, which tracks layoffs, said one of every six jobs eliminated across the nation in September was a result of the housing recession and mortgage meltdown.
Hardest hit was the financial services industry, where firings were three times higher than the next highest sector of automotive, and up dramatically from a year earlier. The report said firings in financial services climbed in the first nine months this year to more than 130,000 up from 34,903 a year ago.
"Financial firms cannot cut their payrolls fast enough, particularly in the mortgage lending sector," said John Challenger, CEO of the firm.
He said Wall Street's "heaviest job cutting has occurred over the last two months as home values fall and foreclosures continue to climb."
He also sees a bleaker holiday period for Wall Street and the New York economy that depends on spending and taxes from bonuses, which totaled a record $36 billion last year but are expected to be down this year amid profit wipeouts.
"Even if the worst of the cuts is over, as some are saying, we could continue to see heavy job cuts in the financial sector through the end of the year."
One of Wall Street's biggest bloodbaths came in the 2001 with nearly 2 million layoffs.
October 4, 2007 -- Wall Street's bloodbath has arrived in earnest with jobs cuts soaring nearly four-fold this year to more than 130,000.
Analysts blame the housing recession for about half those jobs, with Bear Stearns becoming the latest victim yesterday by firing 310 employees in its mortgage operations.
Bear Stearns is also folding together its Encore Credit and Bear Stearns Residential Mortgage units, where total payrolls have been slashed this year by about 40 percent.
Bear Stearns' latest cuts followed a string of layoffs at Wall Street's giants including Morgan Stanley, Lehman Brothers, Merrill Lynch and Credit Suisse totaling nearly 4,000 since the summer, many in the firms' mortgage operations.
A report yesterday by Challenger, Gray & Christmas, which tracks layoffs, said one of every six jobs eliminated across the nation in September was a result of the housing recession and mortgage meltdown.
Hardest hit was the financial services industry, where firings were three times higher than the next highest sector of automotive, and up dramatically from a year earlier. The report said firings in financial services climbed in the first nine months this year to more than 130,000 up from 34,903 a year ago.
"Financial firms cannot cut their payrolls fast enough, particularly in the mortgage lending sector," said John Challenger, CEO of the firm.
He said Wall Street's "heaviest job cutting has occurred over the last two months as home values fall and foreclosures continue to climb."
He also sees a bleaker holiday period for Wall Street and the New York economy that depends on spending and taxes from bonuses, which totaled a record $36 billion last year but are expected to be down this year amid profit wipeouts.
"Even if the worst of the cuts is over, as some are saying, we could continue to see heavy job cuts in the financial sector through the end of the year."
One of Wall Street's biggest bloodbaths came in the 2001 with nearly 2 million layoffs.
Labels: Bear Stearns, Credit Suisse, Encore Credit, layoffs, Lehman, Merrill Lynch, Morgan Stanley, Wall Street
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