350,000 jobs to go in financial sector in 2009?
The bloodletting in the financial-services industry will accelerate in coming months, with job cuts doubling to about 3,50,000 worldwide by mid-2009, said CEO of search firm CTPartners.business Updated: Nov 21, 2008 23:57 IST
The bloodletting in the financial-services industry will accelerate in coming months, with job cuts doubling to about 3,50,000 worldwide by mid-2009, said Brian Sullivan, chief executive officer of search firm CTPartners.
Reductions on that scale would be equivalent to 20 per cent of the global workforce at financial companies before the credit crisis began, said Sullivan, whose firm has worked with Citigroup Inc and JPMorgan Chase & Co. Banks, brokerages and funds have eliminated about 1,70,000 positions worldwide.
“It’s unprecedented,” said Sullivan. “You’re seeing a seismic shift in the population of banking.”
Banks are racing to cut jobs from New York to Sydney as frozen credit markets cause revenues to tumble and the financial industry tries to digest almost $1 trillion of writedowns and losses. The worst financial crisis since the Great Depression will reshape the investment banking industry, Sullivan said.
CTPartners is shifting headhunters from banking to industries such as pharmaceuticals and clean energy as demand for finance professionals dries up. The company is the world’s sixth-largest executive search firm.
Following the collapse of Lehman Brothers, Goldman Sachs and Morgan Stanley have converted themselves into bank holding companies regulated by the Federal Reserve. As such, their ability to take risks will be curbed, lowering profitability, Sullivan said.
Stripped of their ability to use balance sheets for making big trading bets, investment banks will revert to their traditional role of advising on acquisitions, providing research and underwriting stock and bond sales, said Sullivan.
That may spell bad news for the mathematical engineers — so-called quants — who concoct exotic derivatives products or devise computer-driven trading strategies. They were among the most sought-after professionals before the credit freeze.
“The classic investment bankers, advisers, are still going to be in demand,” he said.