A New Wound Every Day: Why Big Banks Are Bleeding Jobs Again
If you’re looking for signs of economic recovery from big banks, you’re out of luck. The financial sector is once again hemorrhaging jobs, and now it’s the trading floors that are looking deserted. Fixed income, currency, and commodity traders were laid off en masse over the past few weeks as division revenues declined.
While the overall economic picture is starting to look better — headline unemployment fell to 6.3 percent in May, comfortably within the Federal Reserve’s target — the picture is not so rosy for currency and fixed income traders.
According to Challenger, Gray & Christmas, a consulting firm that manages executive departures and management restructuring, financial companies cut 61,000 jobs in 2013 compared to 41,000 jobs in 2012, a 34 percent jump.
The leap may be shocking at first, but these cuts have been a long time coming. Big investment banks have been axing jobs on their trading floors, specifically on the fixed income, currencies, and commodities (FICC) desk for the simple reason that there are too many of them and they aren’t bringing in enough trading profits. Banks have waited long enough to see if the markets improve and volatility resumes as trading profits thinned.
Per Coalition, a research firm, trading revenues from the top 10 global investment banks have dropped from $31.6 billion in the first quarter of 2012 to $22 billion in the first quarter of 2014, a fall of 30 percent in two years. In comparison, the numbers of employees on the trading desks have shrunk 15 percent, to 18,702 from 21,962 employees.