The jobs crisis is starting to hit Wall Street banks and brokerage firms, according to a series of Wall Street Journal articles (“Wall Street Wielding the Ax,” by Aaron Lucchetti and Liz Rappaport; “Credit Suisse Set to Ax 600 Jobs,” by Katharina Bart; and “Here’s Why Wall Street Is Cutting Jobs”). A regulatory crackdown on high-risk proprietary trading is reportedly to blame. As the Wall Street Journal put it, “[a] longtime secret sauce on Wall Street ? derivatives trading ? is drying up.” In addition, less trading by retail and hedge fund clients means less fees and commissions are coming in.
Credit Suisse is expected to cut 600 jobs across the board, including fixed-income, equities, commodities, and mergers and acquisitions, targeting “underperformers.” Barclays PLC has cut 700 jobs this year so far. Goldman Sach’s 5% cut earlier this year is apparently just the beginning. Morgan Stanley Smith Barney indicated that it may cut below its previous target of 17,500 brokers. Goldman is expected to cut $1 billion in expenses by mid-2012, a 10% reduction across the board. Citigroup recently terminated one of its commercial paper co-heads., apparently deciding that one person could now do that two-person job.
“We continue to be proactive about monitoring the size of our business relative to client opportunities and market conditions,” a Credit Suisse spokesman was quoted as saying.
If revenue does not pick up, experts say bonuses will tumble.
Attorney J. Boyd Page, the senior partner of age Perry based in Atlanta, said: “As management tries to cut costs to deal with inefficiencies and integration problems, brokers are facing the possibility of being fired or forced to leave. I would expect this to lead to disputes involving front-end bonuses, retention bonuses, possible wrongful termination claims, and other issues arising out of brokers’ employment agreements and the circumstances of the terminations.”
Page Perry routinely handles a wide variety of employment law matters. The firm’s employment law services range from drafting or advising clients about employment agreements and related documents to litigating or arbitrating employment related disputes. Over the years, the firm has developed particular experience and knowledge in dealing with employment law disputes associated with the securities and financial services industries.
Page Perry attorneys have successfully handled employment law disputes involving restrictive covenants and non-compete agreements, confidentiality agreements, employee bonuses and loans, constructive termination, stock option agreements, age, race and gender discrimination, and severance packages.
Page Perry is an Atlanta-based law firm with an active practice in representing individuals in employment disputes with firms in the financial services industry. In the past several years, the firm has won arbitration award for clients in employment disputes in the amounts of $1.7 and $3.9 million. For further information, please contact www.pageperry.com.