The Wall Street employment outlook was mixed in December 2021 as layoffs surged to the highest level seen in this series since October of last year when 2,757 layoffs were recorded. New hiring rose modestly during December for the second consecutive monthly gain.
December 2021 Challenger, Gray & Christmas Report
According to the December Challenger, Gray & Christmas monthly Job Cuts Report released last week, the financial services industry saw planned layoffs surge 678% to 2,216 layoffs from 285 layoffs recorded during the prior month. The December 2021 layoff total was 22,060% higher than the 10 layoffs recorded during December of 2020. During 2021, layoffs totaled 10,784 layoffs, 21% below the 13,677 layoffs recorded during 2020.
New hiring in December was slightly stronger than what was reported in the prior month as financial services firms announced that 557 new jobs were available compared to 300 new jobs available in November 2021. The December 2021 hiring total was 77% lower than the total seen during December 2020 when 2,450 new jobs were available. During 2021, new hiring totaled 22,918 new jobs – 23.5% lower than the 29,958 new jobs on offer during 2020.
For the first time since July, 2021 layoffs exceeded new hiring during December. This marks only the fourth time in 2021 that this has occurred. Over the past twenty-four months net new employment (new hiring less layoffs) in the financial services industry has risen by 26,166 jobs as bank executives have regularly expanded their headcount suggesting cautious optimism about the improving economic outlook as the pandemic eases.
Our Take
Despite the mixed jobs data seen during December, monthly net employment at financial services firms shrank during the month, marking the fourth time this has taken place in the past twelve months. Although layoffs surged in December to the highest level seen since October 2020, we suspect that rising interest rates, strong IPO activity, and healthy trading commission volumes should boost bank earnings through the first half of 2022.
Although the overall Wall Street employment remains constructive, we suspect that hiring of research analysts and sales staff at sell-side and independent research firms will remain weak for the foreseeable future. This is due primarily to the reticence of many asset managers to boost payments to their research counterparties as a result of the fact that most managers are now paying for third-party research out of their own pockets instead of from their client’s trading commissions.