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AUG 2011
With just over 7.6 million employees, the
U.S. financial industry's workforce is at a low not seen since January 1999, according to
U.S. government data. The industry's headcount is down 9 percent since a peak of 8.35 million in late 2006.
Workers are bracing for further cuts as banks eke out profits from less revenue. And many finance jobs, from bank tellers to bond traders, are being replaced by computers.
Goldman Sachs Group Inc, Morgan Stanley, Credit Suisse Group AG, UBS AG and Barclays PLC are among the major banks that plan to cut thousands of jobs, following disappointing earnings reports.
Experts say that unlike prior boom-and-bust cycles, the financial industry may not see more hiring anytime soon.
"In the past, brokerage firms would fire 5,000 brokers one year and then hire 5,000 brokers the next year," said Ernest Patrikis, a partner at Wall Street law firm White & Case who spent 30 years at the Federal Reserve Bank of New York. "That's not what we're seeing this time around."
CENTER OF THE STORM
If the finance industry is shrinking on a more permanent basis, as some suggest, its workers have been slow to catch on. Many of those laid off since 2006 remain unemployed, looking for work in the same sector.
Unemployment in financial services has averaged 6.7 percent over the past 12 months, far below the broader U.S. jobless rate, but more than double what it was when the crisis hit.
"Finance was at the center of the storm in this recession and its aftermath," said John Challenger, head of the job-search counselling firm Challenger, Gray & Christmas. "Those workers don't absorb back into the system as quickly."
Some don't go back at all.
"I said to myself, 'I'm done -- this is a big mess on Wall Street,'" said Rina Lazar, who was a Merrill Lynch analyst, a hedge fund saleswoman and finance recruiter before quitting in 2008. She now uses the same skills to sell kitchen products and cookware for a direct sales company called The Pampered Chef.
Lazar, who has won a trip to
Hawaii as one of the firm's top sellers, said she earns less money than she did on Wall Street, but is happier and more motivated, with more time off.
"I was making six figures by the time I was 23," said Lazar, who is 30. "At the same time, my hours were insane and I had no life. I'm glad I moved on. I'm much happier now."
In some cases, bankers and traders find themselves going for jobs they might have scoffed at a year or two ago.
Rich Rothaar, 27, cut his teeth on Wall Street selling over-the-counter derivatives, a hot commodity in the years leading up to the crisis. But at the height of the turmoil in 2008, Rothaar lost his job.
Two years later, with no job prospects in sight, Rothaar decided to get his hands dirty, literally: he opened a kitchen exhaust cleaning franchise near his hometown in
Long Island.
"On Wall Street, there was no camaraderie, no helping hand," Rothaar said. "It became extremely cutthroat. It just wasn't a fun place to work anymore."
Rothaar says his day-to-day work can be mundane and frustrating, but he likes being a successful entrepreneur.
"On Wall Street, it was much easier and you made more money, which was great," he said. "But it was also very unfulfilling. It feels nice to actually build a business, to have something more tangible than just brokering contracts all day long."
Carrie Luckner-Zimmerman, who left her job as a long-short equity trader to become a pastry chef, echoed the sentiment.
"I would watch those fancy cake shows on TV and think to myself, 'It would be pretty cool to learn how to make those cakes' -- to do something with my hands and create something tangible, rather than just trading," she said.
Luckner-Zimmerman quit a hedge fund called Satellite Asset Management in May 2008. She spent several months learning the pastry craft at Le Cordon Bleu in
Paris and the French Culinary Institute in
New York before launching her own company, Petit Paris Patisserie, in 2009. She now sells French pastries and artisanal bread at catered events and farmer's markets.
By the time she got her new venture off the ground, Satellite Asset Management had started to liquidate.
"Things weren't looking so hot and it was a little stressful," Luckner-Zimmerman said about the end of her nine-year stint in finance. "I took the leap, but if I hadn't made the decision, the decision would have been made for me."
SILVER LINING
If there is a silver lining about the job losses in finance it might be this: a hoard of bright, talented, profit-hungry employees with plenty of time to help jump-start the economy.
One such example: Luke Holden, an ex-investment banker who left Wall Street to open a lobster shack.
Since opening his first Luke's Lobster restaurant in
New York City's
East Village in 2009, Holden's enterprise has spread to five locations in
New York and
Washington, D.C.In the process, he has helped his father in
Maine, who had seen a slowdown in business at his seafood processing company, as well as the lobstermen there. The chain also sells soda and soup from local
Maine businesses, and donates profits to a fishermen's society.
"My dream job would be to go back and lobster every day," said Holden.
Challenger, the jobs consultant, draws a comparison to the tech whizzes who left
Silicon Valley after the dot-com bubble burst a decade ago.
"The talented, educated, smart people often make their way into new interesting areas," he said. "That's important for the country, to have an economy that's nimble enough to not squander its brainpower."
