Wall Street layoffs plunged in August 2022, while hiring plans rose from the extremely low levels recorded in July. The improvement in August’s jobs data reflects the cautiously optimistic view of many bank executives as U.S. inflation starts to moderate, potentially limiting future interest rate hikes by the Fed.
August 2022 Challenger, Gray & Christmas Report
According to the August Challenger, Gray & Christmas monthly Job Cuts Report released last week, the financial services industry saw planned layoffs plunge 93% in August to 153 layoffs from 2,165 layoffs recorded in July. The August 2022 layoff total was 96% higher than the 78 layoffs recorded in August of 2021. During the first eight months of 2022, layoffs totaled 13,118, 64% above the 8,003 layoffs reported during the same period in 2021.
New hiring in August surged 330% as financial services firms announced that 469 new jobs were available compared to 109 new jobs available in July 2022. The August 2022 hiring total was 90% lower than the total seen during August 2021. During the first eight months of 2022, new hiring totaled 20,038 new jobs – 4% lower than the 20,861 new jobs on offer during the same period last year.
As you can see from the above chart, monthly new hiring in August exceeded monthly layoffs — the eighth time this has taken place in the past twelve months. Over the past twenty-four months net new employment (new hiring less layoffs) in the financial services industry has risen by 18,625 jobs as bank executives have gradually expanded their headcount – a trend that started in January 2021.
Over the past two years, net employment on Wall Street has grown in 17 of the past 24 months. However, it is unclear whether this positive trend will reverse in the next six to twelve months as interest rates continue to climb and the likelihood of an economic recession in the U.S. grows.
Despite the positive outlook for overall Wall Street employment over the past two years, we suspect the hiring outlook for the investment research industry will remain subdued as sell-side and independent research firms limit their hiring over the coming 6-12 months. This is due to a large extent to the unwillingness of many asset managers to raise their payments to their sell-side and independent research providers as many pay for external research out of their own pockets. This trend is likely to continue in the coming year as the SEC precludes many EU based asset managers from paying for US investment bank research using hard dollars.