Securities firms around the world will cut as many as 80,000 jobs in the next 18 months as revenue growth begins to slow, said Meredith Whitney, the former Oppenheimer & Co analyst who now runs her own firm.
The reductions, about 10 per cent of current levels, will come after2010 compensation payments, Whitney said in a report.
The industry's payouts will be "down dramatically", said Whitney, who started New York-based Meredith Whitney Group after predicting Citigroup's dividend cut in 2007.
"The key product drivers of Wall St's revenues and profits over the past decade have been in a structural decline over the past three years," Whitney said in the report. "2010 marks the first year in many in which Wall St-centric firms will go through structural changes."
Barclays, Credit Suisse Group and Royal Bank of Scotland Group may lead a slowdown in hiring in Europe as the fixed-income trading boom fizzles out, recruiters said last month.
Barclays Capital's income from trading bonds and commodities fell 40 per cent in the first half amid the sovereign debt crisis. Fixed-income, currencies and commodities trading was the biggest revenue contributor at investment banks from Deutsche Bank to Goldman Sachs Group.
While regulatory reform, including higher capital requirements, will force some of these shifts, there will be a "deeper secular change" due to declining revenue in businesses such as securitisation, Whitney wrote.
Banks around the world cut 330,000 jobs during the latest financial crisis, according to data compiled by Bloomberg.
Some have added employees recently. Barclays Capital hired about 3600 people in the 12 months to June 30, while Credit Suisse hired 1800 and RBS's securities unit increased headcount by about 1100.
Even though emerging markets will continue to expand, they won't do so fast enough to offset the declines in the US and Europe, Whitney said.
