Wall Street Braces for Cold Bonus Season

Many Wall Street executives who have so far survived widespread layoffs in the industry are bracing for news of their bonuses.
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Many Wall Street executives who have so far survived widespread layoffs in the industry will receive word this month of the size of their bonuses, and expectations are predictably grim.

Goldman Sachs

(GS) - Get Report

and

Morgan Stanley

(GS) - Get Report

will tell employees internally what they have received in the middle of the month, say spokesmen for those firms.

JPMorgan Chase

(JPM) - Get Report

will tell employees in the final days of the year, says an executive at the bank, though a spokesman would not confirm this.

Alex Alcott, head of the U.S. investment banking practice at executive recruitment firm Heidrick & Struggles, says he expects bonuses to be down 50% to 75% for the investment bankers who advise companies on things like M&A, IPOs, or issuing debt -- all activities that have virtually ground to a halt. "Many will get nothing at all," he says.

Alcott expects many veteran investment bankers to leave the industry for a time, if not permanently.

"For up-and-comers, they don't have much choice but to try and stay in it," he says.

The U.S. financial services industry has slashed 220,506 jobs so far in 2008, more than any other industry by a wide margin, according to Chicago-based outplacement firm Challenger, Gray & Christmas. Just this week, reports said

Bank of America

(BAC) - Get Report

could cut as many as 30,000 jobs when its merger with

Merrill Lynch

(MER)

is completed and JPMorgan Chase,

Credit Suisse

(CS) - Get Report

and

State Street

(STT) - Get Report

also announced cuts.

"There is no indication yet that the layoffs are slowing down," says CEO John Challenger. New York state leads the country in terms of the total number of layoffs, Challenger says.

Challenger says many financial services employees, in areas such as sales or human resources, can be retrained to move into industries that are still adding jobs, such as health care. However, for highly specialized workers, such as traders, such a shift is far more difficult.