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Layoffs in financial services

Posted by alifinmath on March 21, 2008

Citigroup will be cutting a further 2,000 trading and IB jobs (in addition to the 4,000 announced in January):

March 20 (Bloomberg) — Citigroup Inc. will cut 2,000 more trading and investment-banking jobs as the collapse of the subprime mortgage market puts the biggest U.S. bank on track for its second-straight quarterly loss.

The reductions are in addition to about 4,000 disclosed in January, a person familiar with the plan said.

Wall Street firms have fired more than 30,000 employees in the last seven months as the U.S. housing market contracted and the price of mortgage-related assets plummeted.

Every financial services firm is on red alert.”

And similar news at GS:

March 21 (Bloomberg) — Goldman Sachs Group Inc. plans to dismiss as much as 15 percent of its workforce in the capital markets and related support departments, the New York Post reported, citing unidentified people familiar with the matter.

The reductions are likely to come in the division that includes investment banking, debt and equity underwriting and merger advice, the newspaper said. Employees were first notified about the staff cuts on Monday, the Post reported.

These exemplify points I’ve long been making: a bloated financial services sector is about to be cut down to size. This will have an impact on quants (some of whom have been getting laid off during the last year) and an even more severe impact on would-be-quants who will be angling to get their foot in the door. Their problems are exacerbated by the large number of new MFE programs that have recently come on-stream, which shall be disgorging their own streams of bright-eyed young hopefuls. Even in the cases where these hopefuls have found internships (no mean feat these days), such internships are often not leading to permanent jobs.

The party’s over. It was good (for some) while it lasted.

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