Banks Hiring Again but 2012 Looks Dismal

NEW YORK (TheStreet) -- Reversing a two-month decline, commercial and investment banks added jobs in November, according to the latest employment report from the U.S. Bureau of Labor Statistics.

The financial sector, which broadly includes commercial banks, investment banks, insurance, real estate leasing and finance companies, added 8,000 jobs in November. The report also revised the number of jobs created by the industry in October to 8,000 from 4,000 originally estimated.

Commercial banks added 2,400 jobs in November after shedding 900 jobs in October and about 100 jobs in September. The securities industry showed some sign of stabilization, adding 100 jobs in November after slashing 3,200 jobs in September and 1,100 jobs in October.

Banks, particularly those with capital markets operations, have been announcing layoffs in recent months as macroeconomic uncertainty has weakened the revenue outlook. Investment banks have trimming their workforce in an effort to boost profits, compensation costs being one of the primary expense drivers.

Citigroup(C) is planning to slash 3,000 jobs or 1% of its total workforce, as part of a broader expense-reduction plan, according to people familiar with the situation.

>> 19 Banks Slashing Jobs

Goldman Sachs(GS) is laying off 1,000 employees while Bank of America(BAC) will shed 30,000 jobs over the next few years.

Still, banks are yet to determine how much of the weakness is cyclical and how much is more secular- a lasting effect of a changing regulatory landscape. For now, it looks like employee bonuses more than jobs will feel most of the pain.

Wall Street is likely to see a 30% drop in annual compensation, the Wall Street Journal reported on Monday, citing a study by executive search firm Options Group.

--Written by Shanthi Bharatwaj in New York

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