It’s a hard-knock life for Wall Street’s rank-and-file.
Amid high-interest rates, higher inflation, a slowdown in initial public offerings, a cooling deal market, and a still-unfurling banking crisis, the job market in America’s financial services sector is anything but sunny. In fact, it may just be the toughest industry to get a job in right now.
The Grapes of (Financial) Math
Just two months ago, the unstoppable force of Jerome Powell’s rate-hiking campaign was meeting an immovable object of a white-hot labor market — with February’s 3.4% unemployment rate marking the metric’s lowest point since Neil Armstrong’s small step on the moon. But alas, new labor data from ADP Research and the Stanford Digital Economy Lab released Wednesday shows the job market may be inching downward. US companies added 145,000 jobs last month, below estimates in a Bloomberg survey of economists.
The “financial activities” sector was hit worst of all, shedding 51,000 jobs, according to the ADP data (laid-off portfolio managers might consider a temporary sommelier gig as the leisure and hospitality industry added nearly 100,000 jobs last month). That figure tracks with recent headcount estimates from recruitment consultancy PageGroup, which told Reuters that the banks and financial services sector now employs between 5% and 10% fewer employees than a year ago.
And even the lucky ones who have been able to keep their job are taking home less:
- Bonuses, typically paid in Q1, fell around 20% for commercial bankers from last year, Wall Street compensation consultant Alan Johnson told Reuters. Meanwhile, investment bankers saw bonuses decrease by as much as 50%. Ouch.
- In the securities industry, bonuses fell by over 25% last year, according to a recent report from the New York State Comptroller’s office. And deputy Comptroller Rahul Jain told Reuters bonuses could shrink by another 15% this year.
Swiss Miss: It’s not just Wall Street. The top management brass at Credit Suisse will also miss out on their extra checks — a bonus pool projected to be around 60 million Swiss francs for around 1,000 employees — after Swiss federal regulators stepped in and ordered the company to cancel or reduce all its outstanding C-Suite bonus payments. The unusual move came amid public outcry after the state spent close to $280 billion in funding and guarantees to secure the rescue merger by rival bank UBS. Fair is fair.