"The Protester” may have been Time magazine’s person of the year, but “the Financial Markets Job Seeker” is definitely ours. Finding a job on Wall Street has always been a challenge, but in 2011, that challenge took on Darwinian proportions, becoming truly a survival of the fittest.
Nearly every financial firm announced layoffs in the thousands, with two banks, HSBC and Bank of America, accounting for a staggering 60,000 jobs lost. Total positions eliminated in the financial sector topped more than 200,000, nearly four times the number of layoffs in 2010, and much higher than the estimated 174,000 jobs cut in 2009.
Or as The New York Post put it, “maybe Wall Street should think about occupying Main Street.” While the overall unemployment rate has been dropping to around 8.6 percent, unemployment in financial services has gone up.
Wondering what caused 2011 to be such a dismal year, we decided to look back to see what events or stories had the greatest impact on those looking for work in the financial markets. Here’s what we came up with:
1. Corporate America goes on a Hiring Strike. Due to a confluence of events stemming from new government regulations such as Dodd-Frank, to the European Debt Crisis, it all amounted to the same result − uncertainty in the cost of hiring a new employee. Therefore, many banks and financial services firms simply decided not to fill empty positions. This stymied the financial job seeker more than anything last year as they submitted their resumes only to be ignored or at least in a few cases told that the job they had applied to was no longer available.
2. The Growing Debt Crisis in the Eurozone. While most Americans seemed oblivious to the financial problems in Greece, Spain and Italy, our largest banks, which had exposure to these markets, felt the need to shore up reserves in case of defaults, thus removing money they could have used to create jobs.
3. The War in Iraq Officially Over. Good news for America, bad news for thousands of unemployed veterans entering an already dismal job market. Still, many Wall Street firms such as JPMorgan Chase proclaimed their dedication to hiring as many vets as possible.
4. Standard & Poor’s Downgrades America’s Credit Rating. Go ahead and kick us while we’re down, why don’t you? We could probably just as easily blame this one on Washington and partisan politics that got in the way of figuring out how to reduce the ballooning federal budget deficit. Standard & Poor’s apparently got sick of waiting and downgraded our triple “A” credit rating to a double “A,” raising the cost of capital and lowering consumer confidence.
5. Occupy Wall Street Protests. It all began with a few dozen protesters in a small park near Wall Street, and within a few weeks it had grown into a global phenomenon with several thousand protesters marching on financial centers around the world. In lower Manhattan, one of the protesters even got a job when a financial firm saw her poster listing her skills. This story probably didn’t really impact jobs all that much, but it did occupy our attention for a while, so we’re including it.
6. MF Global. For a while, it was one of the few financial firms hiring, but then something happened. The company under the command of former New Jersey Governor and U.S. Senator Jon Corzine found itself on the wrong side of a bet involving the European bond market. Eventually, it filed for bankruptcy amid a scandal over missing customer money and potential alleged improprieties involving those funds. MF Global poured nearly three thousand (2,800) employees back into the already shrinking financial job market.
7. UBS Loses Billions in Rogue Trading Scandal. Already saddled with poor performances in all but its wealth management sector, a rogue trader cost the firm a few billion dollars in profits and caused the resignation of its CEO. In its restructuring, the bank announced it would be laying off around 3,500 investment banking folks.
Those are our picks for the top stories. We’d like to hear yours as well. All you have to do is register and comment. Also, if you disagree with anything we’ve said here, we’d like to know that too.
Later this week, we’ll have some predictions for 2012.