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Layoffs for Structured Finance?

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Forget bonuses. The question for many in finance right now is whether they'll still have jobs at year's end.
The chorus of those saying there will be layoffs on Wall Street has gotten louder, and the message clearer. Weeks ago we told the viewers of CNBC's On The Money that units in investment banks linked to complicated debt products would be most vulnerable to layoffs. We named Bear Stearns and Lehman Brothers as likely cutters.
Yesterday CNBC's Charlie Gasparino named Bear and Lehman, and threw Goldman Sachs into the mix. The cuts are likely to come shortly after Labor Day. This morning, the Lex column in the Financial Times adds the Royal Bank of Scotland as a probable cutter. It also gives some great background on why structured finance groups are under such pressure.

This rapid shedding of staff reflects the urgent need to cut costs as revenues decline in this highly lucrative and (until recently) growth business. Lehman and RBS, for example, topped the underwriting league tables for asset-backed securities last year, according to Dealogic. Cutting back quickly is par for the course for investment banks, with their high staff costs. It will help, but won’t replace lost revenues. For the top 10 global investment banks, fixed income revenues (where most asset-backed business is booked) reached more than $27bn in the first quarter – more than double the total five years before, according to Credit Suisse. And structured finance has been particularly profitable, so margins are likely to decline too.

Structured finance profits [Financial Times]