The number of financial jobs in Massachusetts continued to drop last month as firms in the Bay State felt the effects of the worldwide financial crisis.
According to the Massachusetts Executive Office of Workplace Development, 1,200 finance, real estate and insurance jobs were shed in the state during September, mostly because of losses in the finance and insurance industries. The sector lost 300 jobs in August, according to a press release. A department spokeswoman could not be reached to elaborate.
"There clearly is a contraction occurring as the result of the tumultuous situation in the markets," Kevin Kiley, chief operating officer of the Massachusetts Bankers Association, told eFinancialCareers News. "Part of it could be the cyclical nature of the economy. (Also), there has been a shakeout on the mortgage side of the business."
New England Doing Better Than Other U.S. Regions
Although the New England economy continues to be stronger than other regions as shown by a lower than average unemployment rate, it is experiencing its share of stress. Boston Mayor Thomas Menino recently announced a hiring freeze and plans to postpone as much as $120 million worth of capital improvement projects, according to the Boston Globe. Financial companies, which have avoided the massive layoffs from the worst financial crisis since the Great Depression, are also feeling the heat. Boston-based recruiters, though, have stressed that hiring continues albeit not at the robust pace of previous years.
"The one place we are most worried about is the financial services sector," says Barry Bluestone, dean of the School of Social Science, Urban Affairs and Public Policy, at Northeastern University. However, he added, "I don't think we are going to be anywhere as near as bad as New York and Northern New Jersey."
Bluestone stressed that Boston is insulated from the market pressures because of the area's large health care sector and universities. What's more, the housing market decline "may have slowed down slightly and even reversed slightly over the past six months," he said. Still, he said, "I am not suggesting we are going to weather this without any trouble." Recent company announcements underscore this point.
Fidelity Cut Jobs Outside U.S.
Boston-based Fidelity Investments' international unit plans to slash as many as 200 jobs in response to a decline in its assets under management, the Financial Times reported recently. London-based Fidelity International, which employs about 4,500 people around the world, already cut 170 jobs last spring following heavy outflows from retail funds. Earlier this year, the Boston-based parent cut about U.S. 250 jobs as part of a corporate restructuring.
State Street Corp., one of the stalwarts of Boston's financial district, went into Wall Street's dog house recently when its earnings report showed rising unrealized losses in commercial paper and other investments. While describing State Street's earnings as "respectable," RBC Capital analyst Gerard Cassidy told Reuters that unrealized losses continue to grow, "and people worry that that could turn into a permanent loss." A spokesman for the Boston-based company could not immediately be reached. State Street, which said it would raise new capital if needed, had been actively recruiting people for some jobs in recent months.
Separately, State Street this month promoted Richard (Rick) Lacaille to a new role as global chief investment officer at its asset management subsidiary, State Street Global Advisors (SSgA). Lacaille will manage a team of asset class CIOs and oversee research and trading. He'll remain in London and reports to Scott Powers, president and chief executive officer of SSgA. He joined the company in 2000.