Sluggish Wall Street Jobs Outlook Continues in April 2024

0

Wall Street layoffs plunged in April to hit 888 layoffs, marking the third consecutive drop in monthly layoffs.  At the same time, hiring plans at investment banks and brokerage firms remained weak in April as no new jobs were available for the fifth consecutive month.

April 2024 Challenger, Gray & Christmas Report

According to the April Challenger, Gray & Christmas monthly Job Cuts Report released a few weeks ago, the financial services industry saw planned layoffs plunge 67.4% to 888 layoffs from 2,721 layoffs recorded in April of last year.  The April layoff total fell 52.2% from May, marking the third consecutive monthly decline in layoffs.  Layoffs over the first four months of the year have totaled 29,603, 11.3% lower than the total seen during the same period of 2023.

On the other hand, new hiring in April 2024 remained extremely weak as financial services firms announced that no new jobs were available compared to 650 new jobs that were available in April 2023.  The April 2024 hiring total was unchanged from the level recorded during the previous four months.   Financial services firms have hired no new staff in 2024, compared to a modest 5,000 new jobs offered during the same period in 2023.

As you can see from the above chart, even though monthly layoffs have dropped in the past few months, layoffs continue to run above hiring.  In fact, layoffs have exceeded hiring for the eleventh time in the past twelve months.  Over the past twenty-four months average net employment (new hiring less layoffs) in the financial services industry has actually shrunk by 18,739 jobs as bank executives continue to shrink their headcount.

Specific April Job Cut Announcements

In early April, Citigroup announced that it will lay off 430 employees across different divisions in New York.  The layoffs will impact 363 employees of the firm’s banking unit, Citibank, while workers in the technology and broker-dealer arm will also be affected.  These layoffs were part of a sweeping overhaul to Citigroup’s staffing levels and management structure, and an effort to improve the firm’s financial performance.  In addition, Citigroup announced plans to slash 187 employees across different divisions in New Jersey.

Also in April, global investment bank Morgan Stanley announced plans to start cutting about 50 investment banking jobs in Asia, excluding Japan.  The planned cuts at Morgan Stanley will results in 40 headcount reductions in Hong Kong and mainland China, and will affect about 13% of the 400 bankers in the Asia Pacific region excluding Japan.  The planned cuts also mark Morgan Stanley’s second such reduction in China this year, after reports in March said the firm had laid off about 9% of its staff at its asset management business in China. 

Later in April, an unnamed insider at UBS was quoted as saying that “roughly 50-to-60% of ex-CS (Credit Suisse staff) will probably be laid off over the five rounds”.  The initial rounds of layoffs are expected to take place in June, with the following rounds taking place in August, September, October and November.

Our Take

While layoffs continued to drop in April, new hiring at Wall Street firms remained weak causing net employment to fall for the eleventh time in the past twelve months.  We suspect this weak jobs outlook will continue for much of the rest of 2024 as inflation remains sticky, interest rates remain high, and geopolitical tensions put a damper on near-term economic activity. 

This bearish outlook for overall Wall Street employment should be evident within the research industry as sell-side and independent research firms restrict their hiring over the coming 6-12 months.  This is due to the unwillingness of most asset managers to boost their research payments to their sell-side and independent research counterparties.  The FCA’s recent proposal to allow UK asset managers to use commissions to pay for research from US investment banks and brokers, should help alleviate the strain on sell-side research revenue.  Despite this fact, the EU’s slow movement on this topic will continue to put pressure on sell-side research payments well into the fourth quarter of 2024.  Consequently, we suspect that buy-side spending on sell-side and independent research will remain tepid throughout the remainder of 2024.

Share.

About Author

Mike Mayhew is one of the leading experts on the investment research industry. In addition to founding Integrity Research, Mike is on the board of directors of Investorside Research Association, the non-profit trade association for the independent research industry, and a frequent speaker on research industry trends and developments. Mike has over thirty years of research industry experience. Email: Michael.Mayhew@integrity-research.com

Leave A Reply