Wednesday's Headlines: On the Horizon - 80,000 Job Cuts Over 18 Months?
Securities firms will cut as many as 80,000 jobs globally - about 10 percent of their workforce - in the next 18 months, predicts Meredith Whitney. The cuts will begin after 2010 compensation is distributed. And for more good news: In a report obtained by Bloomberg, Whitney says comp will be "down dramatically." Her reasoning: "The key product drivers of Wall Street's revenues and profits over the past decade have been in a structural decline over the past three years ... 2010 marks the first year in many in which Wall Street-centric firms will go through structural changes." [Bloomberg]
Equity derivatives and increased leverage will be key to revenue growth for global investment banks in the next couple of years, with the big U.S. and Swiss groups best positioned to take advantage of the trend, says a report by JPMorgan. Overall, JPMorgan predicts investment banking revenue will grow at a compound annual rate of 3 percent through 2012. Regulatory changes, the firm says, will push growth down from its previous double-digit levels. [FT]
Goldman Sachs is reportedly waiting for the 65 to 70 staffers on its principal strategies desk to find new jobs before it announces the unit's shutdown. Some traders and support staff could be reassigned within the firm, and a team in Asia may look to start a new hedge fund. Goldman's closing the desk to comply with new rules on proprietary trading. [Bloomberg]
Bob Diamond's promotion to become group chief executive at Barclays isn't making everyone in the UK happy, but his rise, along with the departure of HSBC's Chairman Stephen Green to become a trade minister, raises the possibility that investment bankers are heading for a clean sweep of running the biggest banks in the UK and Europe. [Financial News]
Janus is pushing into fixed-income. The firm plans to launch a number of global-fixed-income funds for both non-U.S. and U.S. advisers in the coming months. [
