If You're Looking for a Job in Financial Services You May Want to Start Thinking Retail

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Employers announced plans to shed 115,730 workers from their payrolls in September, making it the worst month for job cuts in over two years, with finance largely to blame, a new report shows.

Banks and other financial services firms announced 54,013 planned layoffs between the first of January and the end of September, says global outplacement firm Challenger, Gray & Christmas.

A breakdown Challenger, Gray shared with eFinancialCareers shows that financial services firms plan to hire only 6,130 employees this year, including 939 new positions announced in September. That's less than half the 12,933 financial services positions added in 2010, when just 125 employees were added in September of that year.

Retail Banks Are Adding Jobs

Interestingly, just four banks added jobs last month, said Challenger, Gray spokesperson Colleen Madden, all in the retail banking sector: M&T Bank, First Niagara, Discover Financial and Capital One,

The only area to cut more workers than financial services this year was government, with 159,588 announced job cuts through September 30th. This figure includes 54,182 government-sector cuts in September, 50,000 of which are the result of a five-year troop reduction plan.

Meanwhile, the vast majority of the finance cuts was due to events at one company: Bank of America. Of the 54,013 financial services job cuts this year, 31,167 occurred in September alone, with 30,000 resulting from Bank of America's "multi-year workforce reduction plan," the outsourcing firm said in an announcement. Job cuts in finance through the first three quarters of 2010 totaled 19,474 with 2,254 occurring last September.

"It would be easy to look at the September job-cut figure alongside some of the other less-than-stellar economic news that has been reported lately and draw the conclusion that the economy is indeed headed for a double dip [recession]," said Challenger, Gray CEO John A. Challenger.

Financial services firms have announced an unusually large number of job cuts with 54,013 planned layoffs between January and the end of September. This reflects a 177 percent increase compared with the first three quarters of 2010.

However, it's important to keep in mind that "nearly 70 percent of last month's total came from just two organizations: Bank of America and the United States Army," Challenger said.

"Neither of these cuts is directly related to recent softness in the economy," Challenger noted, but added, "The Bank of America cuts are the result of continued fallout from the housing market collapse and restructuring effort to remake the bank into a smaller, more nimble institution." As Bloomberg Businessweek reported with its announcement of the Challenger figures, the BofA reductions equal to about 10 percent of the staff and are part of an overhaul that aims to remove about $5 billion in annual costs by the end of 2013.

Meanwhile, "the military cuts are the result of drawing down forces in two wars and cost-cutting efforts in all areas of the federal government," Challenger added.

On the downside, he said, there is no reason to expect fewer cuts to come. "Bank of America is not the only bank still struggling in the wake of the housing collapse," said Challenger, Gray's CEO.