U.S. Mass Layoffs Steady In July, Banking Industry Expects Cuts In September
August 23, 2007 12:58 p.m. EST
Linda Young - AHN News Writer
New York, NY (AHN) - The Bureau of Labor Statistics on Thursday released its latest report on mass layoffs in the United States. It showed that the 1,221 mass layoffs in July was about the same as in June, with the automobile industry being most affected. But that could change in September, as banking becomes the most likely industry to face the possibility of mass layoffs.
With the summer's credit swoon, Wall Street investment bankers are concerned about cutting costs for several reasons.
One reason is to convince investors not to take their investment dollars out of risky mortgage-backed bond like investment instruments and put them into safer Federal Treasury notes. The other motivating factor for investment bankers to slash costs is to to preserve their expected year-end bonuses.
That could mean mass layoffs in the banking industry to cut losses from the many problems affecting the investment industry-including mass defaults on sub-prime mortgages.
In fact, layoffs have already begun, although they are, so far, mainly in the investment banking industry, observers expect them to spread to other banking industries, Street.com reports.
"I think [bank execs] are thinking, if I cut right now maybe I save some of this bonus," a senior Wall Street firm executive told TheStreet.com.
Any banking cuts in September would show up in the BLS October report. National unemployment for July stood at 4.6 percent of workers, which was up from 4.5 percent in June, but down from the 4.8 percent a year earlier.
The automobile manufacturing, temporary help services and all other automotive manufacturing were the top three industries that experienced mass layoffs in July, and those three accounted for 17 percent of all layoffs.
A mass layoff is defined as affecting 50 or more people. |
