Wall Street Headcount Down 5 Percent from Peak

Official employment figures for the securities industry are sending mixed signals, with industry headcount in New York City shrinking steadily since September while nationwide employment in securities and related fields continues to post record highs.

Friday's non-farm payrolls report for April showed U.S. payrolls in "securities, commodity contracts, and investments" climbed by a seasonally adjusted 2,200 jobs last month, to a record 867,600. It was the fourth monthly record in a row. While U.S. employment in all industries has declined every month this year, securities industry employment has gained every month. It's up 10,900 (1.3 percent) for the year to date and up 26,800 (3.2 percent) in the past 12 months.

However in New York City and New York State, the Labor Department figures tell a different story. The city-wide figures, which may come closest to capturing Wall Street employment trends, show securities-industry payrolls have fallen by a total of 9,500 (4.95 percent) since last August's cycle peak. In March, the latest month for which data were broken out by both industry and state or city, the industry shed a net 1,600 jobs to 182,300. That's just a hair above where it stood in March 2007. The state and city data are not seasonally adjusted.

The figures affirm anecdotal evidence that hiring and investment trends differ between investment banks, whose work forces are concentrated in the New York area, and the largest investment management and futures trading operations, for the most part located in other regions of the U.S.

Major U.S. and European banks have announced more than 30,000 layoffs since last autumn - without counting the multitude of layoffs from banks' retail mortgage lending subsidiaries. However, those job cuts were worldwide, and some were offset by newly created slots within still-growing business segments such as commodities or risk management.

As a rough benchmark of what a full Wall Street job destruction cycle looks like, during the 2001-2003 bear market New York City securities employment shrank by 20.6 percent from peak to trough, wiping out some 41,300 jobs, Labor Department figures show. Nationwide employment in securities and related fields fell by 11 percent, or 91,400 jobs.

April's first-quarter financial reports brought a raft of fresh layoff announcements. Citigroup and Merrill Lynch said they plan to cut a total of 13,000 jobs this quarter. Credit Suisse plans 500 layoffs, and Royal Bank of Scotland reportedly began notifying some 7,000 prospective casualties of its absorption of ABN Amro. However, RBS's job cuts could be concentrated in the UK and Europe.