Finance Job Losses Near 200K as Firms Cut Back

Finance Job Losses Near 200K as Firms Cut Back
By Ambereen Choudhury, Donal Griffin and Alexis Xydias
November 16, 2011 9:32 AM EST

Pedestrians walk past a Citibank branch in New York. Photographer: Jin Lee/Bloomberg

Job losses in the global financial services industry this year are close to surpassing 200,000 as Citigroup Inc. (C), France’s BNP Paribas SA and Bank of America Corp. (BAC) eliminate employees to reduce costs.

Citigroup, the U.S. bank that shook up senior management earlier this month, may cut as many as 3,000 jobs as Chief Executive Officer Vikram Pandit squeezes out costs, said a person familiar with the company’s plans. BNP Paribas, France’s biggest bank, said today it will trim about 1,400 jobs at its investment-banking unit, with most coming from the lender’s capital markets and structured-finance teams. Bank of America also cut part of its equities unit in Europe yesterday.

The reductions add to the 195,000 banks, insurers and asset managers announced this year, and surpass the 174,000 losses in 2009, data compiled by Bloomberg show. Lenders are reducing staff as the European sovereign debt crisis roils markets, crimps revenue from trading stocks and bonds, and deters companies from takeovers or stock offerings. Regulators are also forcing banks to set aside more capital for their riskiest operations, cutting the profitability of fixed-income units.

“I have never seen it as bad,” said Jason Kennedy, 41, CEO of Kennedy Group in London and a recruiter for the past 16 years. “The future is also bleak. This will continue for another 14 or 15 months: 2012 is definitely a write-off.”

Citigroup Reductions

Citigroup plans to eliminate about 1 percent of its staff, according to the person, who wasn’t authorized to speak publicly about the cuts. The figure is an estimate and may change, the person cautioned. Among the jobs eliminated may be 900 from the division that includes the bank’s trading and investment-banking operations, the person said. Citigroup, ranked third by assets among U.S. lenders, employed about 267,000 people at the end of the third quarter.

“As part of our ongoing efforts to control expenses, we are making targeted headcount reductions in certain businesses and functions across Citi,” Danielle Romero-Apsilos, a spokeswoman for the New York-based lender, said by e-mail.

Citigroup posted a 74 percent increase in third-quarter profit, aided by a $1.9 billion accounting gain that softened the impact of lower trading and investment-banking revenue. The bank said in September it would limit hiring only to “critical” jobs to control costs and boost revenue as new regulations on minimum capital levels take effect.

Read More Here: http://mobile.bloomberg.com/news/2011-11-16/citigroup-said-to-consider-3-000-job-cuts-as-pandit-trims-costs

So much for reducing unemployment......