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Are The Worst Job Cuts Behind Us?

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Are you still at your desk? Good. Then you might be keeping your job. As long as the market doesn’t take another downturn.
That seems to be the message that BreakingViews delivers this morning (subscription required). They point out that despite the onset of the credit crunch, most of the job cuts from Wall Street firms have been “surgical strikes” on mortgage-related units.
UBS has been the only major bank to make very large cuts. Bear Stearns, Lehman Brothers, Credit Suisse and Morgan Stanley have just “trimmed their mortgage teams,” BreakingViews writes. “Or they have sacrificed a head honcho or two.”
“These more surgical strikes might be enough to appease investors if the summer turmoil turns out to be an aberration,” according to BreakingViews.
But you might not want to put a down payment down on that Brooklyn Heights townhouse yet. There are signs that things might get worse before they get better. Despite the helicopter delivery of lower interest rates, the credit markets are still nowhere near what they were a year ago. The structured credit business doesn’t have much business these days. Private equity deals which fueled much of Wall Street’s growth in the past few years remain much scarcer than they were in the “golden age.” And, as Bess Levin will shortly report, some banks are finding ways to trim staff by doing things like shutting down recruiting for areas that have been hit by the recent market changes.
Even BreakingViews ends on a downer.

But if market woes persist, Wall Street will have to take more drastic measures. A fifth of New York City’s financial workforce got the boot in the two years after the 2001 downturn, according to the Securities Industry and Financial Markets Association. Similar bloodshed now would mean pink slips for 40,000 Big Apple financiers.

Blood on the Street [BreakingViews; subscription required]