Will This Industry Shove New York City into a Major Recession?
New York City Comptroller, Thomas DiNapoli, predicts NYC could lose almost 10,000 securities jobs by the end of 2012. The securities industry has seen 22,000 jobs disappear since January 2008. In this report, he also stated bonuses are likely to drop as well.
To make matters worse, across the US the number of people employed in finance (NYSE:XLF) and insurance (NYSE:KIE) is also dropping. According to the Bureau of Labor Statistics, the number of jobs in these sectors fell 8.1% between December 2006 and August 2011. However, during that same time period these jobs fell 8.9% in NYC.
President of Partnership for New York City, Kathryn Wilde said, “The banks I talk to are talking about significantly reduced compensation, which comes right out of our tax rolls, and layoffs and downsizing. All of the above suggests that there’s going to be a real impact on the New York City economy.”
Goldman Sachs Group Inc. (NYSE:GS) said it may cut 1,000 jobs or more, while Bank of America Corp. (NYSE:BAC) plans to fire 40,000 workers. Credit Suisse (NYSE:CS), Barclays (NYSE:BCS), UBS (NYSE:UBS), Deutsche Bank (NYSE:DB), Royal Bank of Scotland (NYSE:RBS) and Lloyd’s (NYSE:LYG) have made similar statements.