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Wall Street layoffs see sharp slow down in 2017

Despite a dramatic drop in job cuts, hiring at US financial firms remained flat in January this year.

By Hayley McDowell hayley.mcdowell@strategic-i.com February 13, 2017 1:52 PM GMT

Layoffs at financial firms in the US have dropped 74% in January this year compared to the same period last year, according to statistics from Challenger, Gray & Christmas.

Job cuts fell from 998 in January 2016 to just 260 in January this year, the lowest level of layoffs seen since May 2013.

The report revealed a negative job outlook within the financial industry, as new hire figures remained flat this month with no new jobs posted from Wall Street firms.

Difficult market conditions, cost-cutting and regulatory burdens are likely reasons for the cutbacks in staff across the industry, as seen recently at Deutsche Bank.

The German bank confirmed earlier this month it would be scaling back its global trading teams with 17% of its equities staff and 6% of its fixed income staff globally set to lose their jobs.

The cuts formed part of Deutsche Bank’s wider restructuring and cost saving plans - announced in October 2015 - which outlined its intention to cut 9,000 staff.

Deutsche is planning to save €3.8 billion by 2018 through restructuring and severance costs of between €3 billion and €3.5 billion.

The investment banking industry will continue to reduce trading activity in 2017 as regulatory restrictions tighten profits, according to a report on capital market trends.

The report - authored by Capgemini - revealed revenues across the top 10 global banks in the first six month of 2016 plummeted 15% compared to the same period in 2015.

The decline in revenues and consistently low returns on equity have prompted a shift in investment banking business models, as trading activities are phased-out as part of cost-saving initiatives.

Capgemini explained investment banks are moving away from capital-intensive fixed income trading, toward advisory and underwriting functions that provide higher margins.