CNN Money is reporting State, city layoffs: 45,000 and counting.
With falling revenue from sales and income taxes, and property-tax declines looming, states, cities and towns have already laid off tens of thousands of government employees. The American Federation of State, County and Municipal Employees, a public employees union, says about 45,000 government layoffs have been announced this year.
There are 29 states, including California, Florida and Ohio, facing a combined budget shortfall of at least $48 billion in the fiscal year that starts July 1, according to the Center on Budget and Policy Priorities (CBPP), a liberal think tank.
There are nearly 20 million state and local government employees in the country. So a 1% decline in employment at cities, towns, schools and states would result in a job loss of almost 200,000 people, a much larger amount than we’ve seen from battered sectors such as automakers or home builders in the past two years.
The effect of those layoffs will far outweigh any benefit of the economic stimulus package, much of which was already spent. We must use the word benefit loosely because government giving away money it does not have never produces any economic benefit.
Bank of America To Cut 7,500
MarketWatch is reporting Bank of America sees 7,500 job cuts after Countrywide close.
Bank of America Corp. (BAC) said Thursday it expects to make about 7,500 job cuts after acquiring Countrywide Financial Corp. (CFC) . Affected employees will start finding out their fate in the third quarter. “
Citigroup to cut 6,500
The TimesOnline is reporting Citigroup and Goldman Sachs cut more staff.
Citigroup, America’s largest bank, is expected to cut up to 6,500 investment banking jobs – as much as 10 per cent of its roughly 65,000 headcount worldwide. It is believed that entire trading desks in New York, London and other cities will be eliminated. Senior managing directors will not be immune from the layoffs.
In April, Citigroup said that 9,000 jobs would go on top of the 21,000 eliminated in the past year. [This is yet another 6,500 – Mish]
175,000 Financial Cuts Coming
Bloomberg is reporting Financial Firms May Make Deeper Cuts, Eliminate 175,000 Jobs.
The world’s biggest financial firms may lose as many as 175,000 jobs by this time next year as Citigroup Inc. and other banks shed workers amid slowing revenue and billions in writedowns, executive recruiters say.
“The worst is yet to come,” Russ Gerson, head of New York- based recruiting firm Gerson Group, said yesterday in an interview. “We are going to have a major contraction. This is affecting all areas of the investment banking universe and it’s affecting all areas globally.”
New York-based Bear Stearns Cos. is cutting more than 9,000 jobs, or 66 percent of its workforce, as it was acquired by JPMorgan Chase & Co. Zurich-based UBS AG has announced 7,000 job cuts, and Lehman Brothers Holdings Inc. has trimmed 6,300 employees.
The Independent Budget Office in Manhattan said in a report issued last month that it expects 33,300 finance jobs in the city, or 7.1 percent of the total, to be cut from the peak in 2007. The industry lost 52,500 jobs in New York during the 2000- to-2003 market drop.
About 17 percent of banking and securities jobs in New York were wiped out from 2000 to 2003, the Bureau of Labor Statistics said. The current round of cuts may claim 35 percent to 40 percent of the industry, said Gary Goldstein, chairman of New York-based financial recruitment firm Whitney Group.
“They just keep chopping heads,” Goldstein said. “They’ll wake up one day and realize that they’ve cut too deep and now these businesses have come back and they don’t have anybody to do them.”
Goldstein Needs To Wake Up
This is the backside of Peak Credit.
None of the financial engineering jobs that fueled this credit boom will ever be needed again. SIVs, Conduits, Toggle Bonds, Covenant Lite loans are all dead for years, more likely decades to come. Add to that liar loans, Pay Option Arms, insane leverage, and numerous other ridiculous lending arrangements. And if those things are not coming back, we do not need Wall Street shills to securitize that garbage and pitch it to unsuspecting suckers.
More Mergers Coming Up
There are undoubtedly more bank mergers coming up. The strong swallow the weak to the point the strong become weak. And with each merger there will be more job cuts, massive job cuts. Bank of America’s announced cutback of 7,500 related to its acquiring Countrywide is just a small down payment of what’s coming down the pike.
Unemployment is poised to soar. Few are prepared for it.
Mike “Mish” Shedlock
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