Home Page Financial Sector Job Drain Not Over By Jonathan Stempel NEW YORK (Reuters) - New York City's securities industry, which has lost more than one-fifth of its work force since 2000, may not have seen the last of its job losses, a trade group said on Friday. The Securities Industry Association nevertheless said employment may rise 2 percent to 3 percent in 2004, as higher investment banking and merger activity persuades more firms to join Lehman Brothers Holdings Inc., Merrill Lynch & Co. and others in adding staff. "We haven't seen a bottom formed," said SIA Chief Economist Frank Fernandez in an interview. "We hear anecdotally that the bottom may have occurred. All of the things that drove New York down faster than the national average are probably behind us, particularly with respect to geographic dispersion." Financial services firms have since 2001 scattered some operations to minimize disruptions in case of another disaster like the Sept. 11 attacks. New York City in January had 158,300 securities jobs, down 42,000, or 22 percent, from December 2000, the SIA said, citing revised data from the Bureau of Labor Statistics. Statewide, employment in the industry fell 18 percent to 177,900. The city still accounts for 21 percent of U.S. securities industry jobs, but that's down from 30 percent a decade ago. Industry employment nationwide totaled 770,700 in January, down 8 percent from the March 2001 peak, the SIA said. Industry profit more than doubled last year to $15 billion, the group has estimated. City employment at brokerage houses standing alone has fallen 27 percent since Dec. 2000 to 111,500, according to James Brown, a labor market analyst with the New York State Department of Labor. "Their biggest cost is personnel, where is where cutbacks will be when business" falters, Brown said in an interview. The city, he said, is "not hanging onto its full share." HIRING ON THE HORIZON Ray Soifer, whose Soifer Consulting LLC of Ridgewood, New Jersey, advises financial services firms, expects Wall Street to add senior investment bankers and merger specialists and to bolster its profitable stock and bond trading operations. Increased regulatory burdens will also require more hiring in compliance and record-keeping, he said. "On the other hand, there is a move toward outsourcing or sending lower-level and operational functions overseas" to such places as India to cut costs, Soifer said. "Even within the metropolitan area you've got the continuing response to 9/11, the need to decentralize operations." Fernandez noted that "proximity to New York is no longer a requirement" for certain jobs, especially given the area's high living costs. Not all banks and brokerages are retrenching in the city. Bank of America Corp., for example, plans by 2008 to build a 2.1 million square-foot tower near Times Square in midtown Manhattan. State Comptroller Alan Hevesi has said lower industry profits and jobs in 2001 and 2002 was a big factor in the city's recent budget problems. The office of City Comptroller William Thompson was not immediately available for comment. (Additional reporting by Linda Prospero) More News: 3-26-04 Consumers More Sanguine, Spending Less 3-26-04 Dividend Tax Changes Cause Headaches for Some Taxpayers 3-26-04 US consumer spending growth decelerates, hit by job fears 3-26-04 Economy, war spur protests 3-26-04 GDP growth suggests economy on upswing 3-26-04 IRS tells investors feeling robbed doesn't count for deductions 3-26-04 Mortgage rates edge up 3-26-04 Most U.S. companies plan more outsourcing-survey 3-26-04 Tax refunds less than predicted 3-26-04 US consumer confidence improves 3-26-04 U.S. Economy: Personal Spending, Confidence Climb 3-26-04 U.S. EPA may revise vehicle fuel economy tests 3-26-04 U.S. mortgage bonds edge lower in modest trade 3-26-04 U.S. Personal Spending Rise Is Smallest in 4 Months Financial News

 

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