Bear Stearns gave 100 employees their walking papers yesterday, according to CNN Money. The cuts hit Bear’s subprime unit, Encore Credit. Headhunters say that more cuts are on the way thanks to the recent “meltdown” in financial markets.
In many cases, the divisions which have been hit most by the recent downturn are the ones that have been aggressively growing their headcount. The prime brokerage business, which services hedge funds, for instance, has grown dramatically in recent years, Sarch noted.
Alan Johnson, managing director of Johnson Associates, a New York compensation consulting firm, expects layoffs in the mortgage and structured products divisions of the big banks before the end of the year.
Business was brisk at Wall Street firms until turmoil hit this summer. At the heart of the crisis are complex securities that have exploded on Wall Street in recent years. Trading and issuance of these debt instruments, which often are backed by home loans, has stalled amid a mortgage meltdown.
"This is not going to help structured credit traders or even vanilla credit traders, nor is it going to assist the career prospects for those in synthetic structures by any stretch of the imagination," said Shaun Springer, chief executive of Napier Scott, a headhunter in London, where several Wall Street firms have been growing their ranks.
This is all getting a bit depressing. We suppose, however, that it’s better to know what to expect than not. Send word of layoffs or even rumors of layoffs to firstname.lastname@example.org. We’ll keep you posted.
Wall Street: Jobs at risk [CNNMoney]