Wall Street Jobs Plunge as Profits Soar: CHART OF THE DAYMax Raskin and Ilan Kolet
Finding work on Wall Street is getting tougher as algorithms replace traders.
The CHART OF THE DAY shows the number of people employed in New York City in “securities and commodities contracts intermediation and brokerage,” which includes investment banking and securities dealing, fell to about 101,200 in March, a decline of more than 30 percent from the peak in December 2000 and the fewest in Bureau of Labor records dating to 1990.
“The desire is to drive the cost of executing a trade to its lowest point -- this means automating the system and getting rid of the traders,” Richard Bove, a bank analyst with Rafferty Capital Markets LLC, said in a telephone interview. “All they do today is hit buttons on computer screens. Twenty-five years ago they would be calling their buddies at different firms. It was a highly labor intensive effort.”
New York’s “inhospitable” climate for commercial banks, along with falling demand for financial services and increasing automation is driving the decline in jobs, Bove said.
U.S. banks had $141.3 billion in net income last year, the second-best on record after the $145.3 billion reported in 2006, according to the Federal Deposit Insurance Corp.
Citigroup Chief Executive Officer Michael Corbat announced plans in December to eliminate 11,000 jobs as part of a range of cost-cuts that will save about $900 million this year. The dismissals added to 5,000 announced by former CEO Vikram Pandit the previous January.
Bank of America Corp. has announced plans to cut at least 30,000 jobs to help shave $8 billion per year in annual costs.