Massive Wall Street Layoffs Feared as Banking Profits Tank
There have been whispers of an impending freeze on hiring and even layoffs across financial firms as soaring interest rates and recession fears have tanked appetites for mergers, IPOs and other big corporate deals, sources revealed to The Post.
At an industry luncheon last week with executives from top banks including JPMorgan and Morgan Stanley, chatter was dominated by speculation that layoffs will ravage the industry’s workforce by at least 10% — and that the bloodbath could be in full swing by year’s end, sources told The Post.
“The conversation was all about when people think hiring freezes will happen and when the layoffs are coming,” a source with knowledge told The Post.
It’s an about-face from last spring, when junior bankers at Goldman Sachs griped to their bosses a leaked Power Point presentation about 100-hour work weeks that they claimed were endangering their mental and physical health.
Last month, JPMorgan reportedly began laying off hundreds of bankers in its mortgage division, citing “cyclical changes.” Insiders suggest bankers focused on SPACs could next be on the chopping block in a matter of weeks.
“It’ll start with smaller layoffs at first — the kids who don’t have anything to do,” one executive told The Post.
Last year, big banks including Goldman Sachs, JPMorgan and Morgan Stanley hiked salaries for entry-level bankers to unprecedented heights, partly because of a feeding frenzy for so-called “blank check” companies, or SPACs — a new vehicle for taking companies public quickly that sparked a unprecedented deal volume last year as the pandemic waned.
But those deals have since dried up, setting the stage for job carnage, sources said. Last week, JPMorgan Chase and Morgan Stanley both reported surprisingly steep profit drops. While JPMorgan revealed its investment banking fees tanked 54% in the most recent quarter, Morgan Stanley said its equity underwriting fees were off 86%.
This article was first published by Lydia Moynihan on New York Post.
