Monday’s Headlines: Impending Wall Street Layoffs Will Rival Crisis

It’s that bad. A Fortune article says New York’s financial industry is on the verge of cutting around 21,000 positions, with global layoffs predicted to be even higher. By comparison, the 2008 financial crisis meant the loss of 28,000 Wall Street jobs. Recruiters expect Credit Suisse and Bank of America to be the first to hand out the first round of pink slips.

Recruiters blame a shrinking number of deals, as well as a trend of large firms hiring investment bankers directly to save on Wall Street fees. The magazine continues:

Perhaps the biggest problem at the banks is that they didn't cut enough jobs last time around. Mergers and acquisition activity also has not bounced back as expected, leaving a number of high paid bankers idle. What's more, new regulations appear to already be significantly curtailing the banks' trading operations. Also weighing on the banks is the fact that debt watchers Moody's and Standard & Poors say they are likely to soon downgrade the bond ratings of the firms. The nation's five largest banks have estimated that the downgrades could cost them $22 billion in additional costs or collateral requirements.

 

Other News:

National Australia Bank will shrink its British division by 1,400 jobs. [Bloomberg]

Goldman closed “dark pool” Sigma X Canada trading platform. [Businessweek]

Private equity firm Terra Firma will buy British nursing home group Four Seasons Health Care for $1.3 billion. [DealBook]

RBS’s M&A unit will be spun off into a boutique advisory firm. [Reuters]

British insurer Aviva’s CEO will forego a pay hike following criticism. [NY Times]

Wells Fargo’s purchase of Merlin signals an entry into prime brokerage. [Investment News]

Qatar will co-invest $250 million with Barclays Natural Resources Investments. [Reuters]

Investment News’s special section on recent grads and the financial advisor shortage. [Investment News]

After its $7.2 billion offer for Bank Danamon of Indonesia, DBS Group will refrain from acquisitions for the next couple of years. [Bloomberg]

Jim O’Neill, the Goldman economist who coined the term “BRIC,” was approached as a possible candidate to lead the British central bank. [Reuters]

Investors may succeed where politicians, regulators and the press have failed in forcing banks to change their business models. [WSJ]