IIt’s easy Now I would like to point out phenomena that were characteristic of the zero interest age. Ape jpegs is sold for millions of dollars; Algorithms for pricing and buying houses; 20 technicians creating Day in the Life TikToks consisting solely of making snacks. Investment banks’ record profits seem to be another relic of the golden age. Workers hired to meet the huge demand had to twiddle their thumbs. Now they are shown the door.
Wall Street institutions are cutting staff ahead of the release of their second-quarter results. Goldman Sachs eliminated 3,200 in the first quarter; On May 30, reports indicated that the bank would lay off another 250 – this time mostly from senior management. Morgan Stanley fired about 3,000 employees in the second quarter. Bank of America cut 4,000 and Citigroup 5,000. Layoffs are also affecting less glamorous areas of finance. Accenture and kpmg both swung the axe.
This is important not only for the poor souls who are being given their belongings in a box, but also for the city of New York. Just as layoffs in tech hurt San Francisco, layoffs in finance will hurt the Big Apple. According to Enrico Moretti, an economist at the University of California, Berkeley, each of the “knowledge jobs” that make cities like New York and San Francisco successful support five other service jobs — some well-paid (like lawyers), some less (like baristas). ). Even if there are no more layoffs, the cut will take its toll on Wall Street. According to New York’s state auditor, the average bonus pool shrank by a fifth in the last fiscal year, the sharpest decline since the 2007/2009 global financial crisis.
While banks haven’t rocketed quite as much as tech companies during the Covid-19 pandemic as online activity increased and work patterns seemed to change for good, in some places the ax cuts almost as deep. Meta’s workforce nearly doubled between 2019 and 2022; Since then, the company has fired about half of its new hires. Goldman’s workforce grew by just over a quarter between late 2019 and late 2022, from around 38,000 to just over 48,000. By laying off around 3,450 employees, the company was able to handle a third of this increase.
Other banks have been somewhat slower in winding down. At Morgan Stanley, where employment also rose by a third over the same period, only an eighth of the gain was reversed. It’s similar at Citigroup. JPMorgan Chase, the king of Wall Street, has yet to see any major layoffs. All in all, the loss of jobs might slow New York’s economy a little — perhaps the market for TriBeCa lofts will cool off — but for a city of this size and vitality, they’re unlikely to be a fatal blow.
But maybe the story goes further. 2022 saw massive layoffs in the tech industry as almost 165,000 jobs were lost. They’re coming close and fast now. More than 210,000 jobs have been cut since the beginning of the year. History suggests that layoff seasons are gaining momentum. It took years for the banks to downsize in the wake of the global financial crisis. Just like tech companies, layoffs would need to be many times higher to bring financial companies back to pre-pandemic size. Even though the banks are shedding fat, they don’t look skinny yet. ■
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