Banks Continue Killing Jobs

Story updated with additional information.

NEW YORK (TheStreet) -- Reports that layoffs have begun to resume on Wall Street are starting to see some confirmation in the jobs report, with the financial sector being among the industries that shed jobs in June.

According to the Bureau of Labor Statistics' nonfarm payrolls report, the "Financial activities" sector shed 15,000 jobs in June on a seasonally adjusted basis after adding 14,000 in May.

Financial activities include banks, insurance companies, real estate, rental and leasing sectors.

The sector breakdown showed finance and insurance category laid off 8,700 jobs after creating 9,100 in May. Within that, commercial banks shed 3,400 jobs after adding 6,800 in May.

Investment banks are starting to reduce payrolls amid a tough operating environment and tighter regulations. Goldman Sachs (GS) recently said in a filing that it may cut about 230 jobs in the New York region between September this year and March 2012, citing economic reasons. The filing did not specify the details of the people it planned to layoff. Goldman plans to add jobs in other countries such as Brazil, India and Singapore.

Credit Suisse (CS) started laying off investment-banking employees last week, and the cost-cutting push could claim 400 to 600 jobs the Wall Street Journal reported, citing people familiar with the situation.

Morgan Stanley (MS) recently indicated that it might cut more jobs from its brokerage arm.

The money center banks are also being driven to cut costs as revenue pressures continue and legal costs climb. Bank of America (BAC) said Thursday that it would layoff 100 people in Connecticut.

The company is eliminating 56 positions at its Hartford Cash Vault site, transferring the work to Dedham, Mass., and Schenectady, N.Y. It is also exiting its East Hartford Lockbox site, which will affect about 50 workers. The work will be relocated to Boston.

Layoffs will take place in Hartford on Sept. 23 and between Aug. 11 and Dec. 1 in East Hartford.

Wells Fargo (WFC) is expected to reveal more details of its cost-savings initiative "Project Compass" this quarter which is focused on delivering savings by cutting down response times for loan applications, eliminating redundancies to name a few. The bank has not spoken about reducing its workforce. But Deutsche Bank analysts expect some "right-sizing" in its mortgage business.

The finance and insurance sector has been the weak link in the jobs recovery story. The sector has lost more than 80,000 jobs in total on a seasonally adjusted basis since June 2009, when the recession officially ended.

--Written by Shanthi Bharatwaj in New York



>To contact the writer of this article, click here: Shanthi Bharatwaj.

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