Wall Street executives look set to confront severe pay cuts this year as banks come under pressure to axe costs, recruiters have warned.
Goldman Sachs, Morgan Stanley and JPMorgan Chase all put aside less money in the first half of the year to pay salaries and bonuses.Several, including Goldman Sachs, have also accelerated cost cutting efforts.
Almost four years on from the financial crisis, Wall Street's heavyweight banks are grappling with Europe's debt crisis and a slowing US economy that have hit the fixed-income and equity trading volumes they rely on.
During the first half of the year, Morgan Stanley reserved $8.06bn (5.17bn pounds) for compensation, a drop of 9.5pc from the year before.
The equivalent drop for JPMorgan was 16pc to $4.91bn, while Goldman saw a 14pc fall to $7.29bn. "It's going to be very disappointing for a lot of Wall Streeters," said Jeanne Branthover, managing director at Boyden Global Search in New York.
"The trend will be down as much as 20pc, and could be more depending on the firm and type of business."
Alongside a deteriorating economic backdrop, banks have also seen new regulations outlaw several activities that were profitable before the financial crash.
Meredith Whitney, a banking analyst, said last week that Wall Street banks will collectively have to cut 50,000 jobs because revenues are unlikely to pick up anytime soon.
Deutsche Bank last week said it will be eliminating more than 1,000 jobs, while Morgan Stanley intends to cut a total of 4,000 this year.
telegraph.co.uk
Goldman Sachs, Morgan Stanley and JPMorgan Chase all put aside less money in the first half of the year to pay salaries and bonuses.Several, including Goldman Sachs, have also accelerated cost cutting efforts.
Almost four years on from the financial crisis, Wall Street's heavyweight banks are grappling with Europe's debt crisis and a slowing US economy that have hit the fixed-income and equity trading volumes they rely on.
During the first half of the year, Morgan Stanley reserved $8.06bn (5.17bn pounds) for compensation, a drop of 9.5pc from the year before.
The equivalent drop for JPMorgan was 16pc to $4.91bn, while Goldman saw a 14pc fall to $7.29bn. "It's going to be very disappointing for a lot of Wall Streeters," said Jeanne Branthover, managing director at Boyden Global Search in New York.
"The trend will be down as much as 20pc, and could be more depending on the firm and type of business."
Alongside a deteriorating economic backdrop, banks have also seen new regulations outlaw several activities that were profitable before the financial crash.
Meredith Whitney, a banking analyst, said last week that Wall Street banks will collectively have to cut 50,000 jobs because revenues are unlikely to pick up anytime soon.
Deutsche Bank last week said it will be eliminating more than 1,000 jobs, while Morgan Stanley intends to cut a total of 4,000 this year.
telegraph.co.uk
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