Wall Street layoffs could surge past 200,000

Friday 24th October, 06:55 AM JST

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tkoind2 at 10:36 AM JST - 24th October

But it isn't the traders that will suffer. As nisegaijin said, it will be the back office people who go suffering. And they were never making big money to start with.

Either way, downstream Joe and Jan average will be in trouble as companys serving these guys see massive business drops and go under, their suppliers get hit, their partners get hit an so on.

We can call it whatever we like. But this is our generation's depression.
skipthesong at 10:58 AM JST - 24th October

back office people will suffer.. but hey guess what, many of these IT, acct, HR types have had it a bit too good over the past few years. Get a cert and walk into a job with 100k. I cringe at the outsourcing world, but to tell the truth, I have a better work force from India, China and Bangladesh IT guys then most of the people from the UK, US and Canada. Heck, most I know don't even have college degrees, just pass a test. And don't get me started with these gajins techs in Tokyo either. Way over priced and 80% I have met don't even speak half the Japanese I do and I ain't even good. So not only do we get an over priced gaijin, we constantly have to find a suitable Japanese with good English skills to back him/her up.

Many of these people you are feeling sorry about have been added weight as well. Sorry if I offend, but that is what we all talk about. We constantly have problems keeping people as they run off every six months or so. Their attitudes alone have one of the biggest reasons we have gotten stuff done in India, China, and Bangladesh.

So the problem doesn't just lay in the economics but also in the attitude as well. Hopefully, many will now will adjust their attitudes. Things are going to be hard for many, but if you have cash put away and you should have you can get on many of the new investment band wagons out there that have come up due to this crises. House sales in California are back up 65%. You can get some really great deals people. Buy now! You can still get in on so many other investments as well.
SushiSake3 at 11:51 AM JST - 24th October

Yet, another defining moment in President Bush's illustrious time as president.
tkoind2 at 11:57 AM JST - 24th October

Skipthesong. Then you are part of the problem mate. Contributing to the commoditization of labor.

I work in a large firm and a very large number of back office and IT people here are devoted and do not make massive money. They work long hard hours and deliver what is required. We also outsource and that serves some purpose as well.

But when we look at the US economy, one key problem is that people in the middle class are losing jobs so companies and widen profit margins. They would rather pay someone abroad a tiny salary to do the same work than support their local US based community. And these same hiring manager, like you, then turn around and complain about the death of the middle class. Who do you think killed it?

As labor becomes a commodity it will end up going for the lowest possible price. The only model where it goes up is if there are labor shortages. But given the environment and the increasingly streamlined nature of business that model will be less and less likely.

As long as you have reasonable quality labor for very low prices there will never be a reason for the labor commodity to rise. On the contrary there will always be pressure for it to go down in value to attract business.

It is a losing proposition for every middle class society on the planet. And the only people benefiting from it are the people making a fortune off the profit margins.

Well... labor should start to fight back. And it will.
Statistician at 12:08 PM JST - 24th October

A lot of extra votes for Obama
skipthesong at 12:26 PM JST - 24th October

“This was inevitable because there’s just not enough money out there to support the huge staffs these banks and investment banks had before.” tkoind2: the above statement says a lot. Now, I don't know if you have had the experience of winning state or city contracts, but let me tell you how many problems come from union workers, which if you go to any east coast city, and to do any type of office m&c, fitouts, etc.. you will have no choice and for the price you have to pay and suck up the attitudes you will understand my position on this. I am sure your staff at your office are dedicated, but from my experience, most Americans working in large MNCs have for the most part, a very stuck up manner about themselves and their skills, which I would debate. It seems people feel they are owed, should be catered to, and throw out demands left and right.
tkoind2 at 12:43 PM JST - 24th October
Granted there are deep problems here. But the danger here is even more threatening. If labor is allowed to become a commodity, then we are lost as a nation able to sustain a middle class. I think it becomes a question of patriotism over opportunism.

We've seen the system falling apart. Why? Because it is like a virus and you just cannot maintain that kind of growth forever. Sooner or later energy, resources, demand or money will put an end to it. In this case it is credit. But a few months ago it could easily have been energy costs.

We need to change the dynamics in labor. Entitlement has to go out the door along with the existing union structures. So here is my proposal.
1. Begin by putting more money into education. Make it a social right and assure that everyone capable of learning something has the chance to do so.
2. Follow this up with a 2 year payback system where beneficiaries of these programs give something back to communities, to sponsor business etc...
3. We need to rethink labor organization to make it practical. This means the creation of new bodies to represent and protect workers.
4. Business, especially small need protecting too. So we create coalition groups to represent and support them as well.
5. Tax breaks and benefits for companies that keep jobs not only at home in the US but in their home states and towns. Even more breaks and help for companies that set up shop in depressed employment areas.
6. Tax companies that produce goods outside the US and then import them to the US. Make it expensive for them and they will come home or shift their plans.
These ideas are just starters to work on the trade deficit, to work on better labor and employment conditions and for the encouragement of domestic industry.

We should do what Obama recommends and shift a lot of our economy to clean energy. And we should invest domestically. Those investments create jobs, generate demand which then creates more jobs, creates a tax base and empowers communities while declining the need for social welfare.

We need a new deal and new model of labor and commerce.
skipthesong at 01:00 PM JST - 24th October
tkoind: I never thought I would find myself liking you... today I do. allow me to c & p just to touch your points: Begin by putting more money into education. Make it a social right and assure that everyone capable of learning something has the chance to do so. skip: kind of like they have in Europe where even college is free? I like that idea.
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  Follow this up with a 2 year payback system where beneficiaries of these programs give something back to communities, to sponsor business etc...
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skip: spot on bro.
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  We need to rethink labor organization to make it practical. This means the creation of new bodies to represent and protect workers.
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kip: true, but they could hamper things like advancement of technology. Take Japan for example and I can say with confidence, teh main reason we don't have alternative energy even at home owner level is due to the government trying to protect large pools of labor. Its 2mil yen fee to put solar on your house and 3.5mil in Tokyo. This is why no one is jumping on it right now and you won't get paid for pumping energy into the grid.
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  Business, especially small need protecting too. So we create coalition groups to represent and support them as well.
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Skip: Ok, I get breaks and I also get guaranteed 10% contracting in three states. It isn't overly fair, but in order to protect these small business like the ones I have, you need to keep a cap on minimum wages. I have a lot of work to offer, but I am not going to hire a bunch at a higher rate, especially for work that only requires strength
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  Tax breaks and benefits for companies that keep jobs not only at home in the US but in their home states and towns. Even more breaks and help for companies that set up shop in depressed employment areas.
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skip: this is a great idea and I want that to happen. But doing that means another country which has been a supplier, like China may take an unfairly hit.
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  Tax companies that produce goods outside the US and then import them to the US. Make it expensive for them and they will come home or shift their plans.
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skip: same here.

These ideas are just starters to work on the trade deficit, to work on better labor and employment conditions and for the encouragement of domestic industry. skip: they are great ideas, but no one is going to do em. Not Obama nor McCain.

We should do what Obama recommends and shift a lot of our economy to clean energy." You would be my best friend if you could pull that off and I would even put you on a life time salary, but have you taken a look at what kind of chaos its going to cause? No, if anyone had the right ideas, it is Mr. Pickens and even Ross Perot back in the day had a great plan. Americans didn't care about that then, and they don't care about that now. They care about the candidate. Obama can come out say he loves oil, and it wouldn't even make even a small media clip.

And we should invest domestically." Invest in what? The government is only getting bigger and bigger and more troublesome. McCain will increase the size of government and Obama will do it two fold. They don't have a choice.

Those investments create jobs, generate demand which then creates more jobs, creates a tax base and empowers communities while declining the need for social welfare." Do you recall when several states tried the work for welfare approach?

We need a new deal and new model of labor and commerce." Perhaps when I am in my late 30's or 40's we'll see that. We are not going to see anything in the next four or eight years.
wanderlust at 01:03 PM JST - 24th October

> “This was inevitable because there’s just not enough money out there to support the huge staffs these banks and investment banks had before.”

Goldman's average salary for ALL staff has been widely reported to be US$500-600,000/ year, taking into account everyone from Lloyd Blankfein at the top down to Suzy Lunchbox. If the business model cannot support this, either reduce/ re-distribute salaries, or get rid of staff. Looks like GS staff want to continue to be highly paid, so there will just be less of them.

Guess there's no altruism on Wall Street.
SuperLib at 01:36 PM JST - 24th October

Yeah, I would agree that better job security would benefit the country overall, but I think there are also risks involved depending on how you do it.

Begin by putting more money into education.

I think the US spends more per child than most other countries, but the results don't match the money spent. This is an area where new ideas or approaches would work better than more money.

You also mention things like tax breaks, which are great, but they also reduce tax revenues, which are what you're saying is needed to help shore up some of the programs you want.

There are also problems when you think of the economy as being global. General Motors is paying something like $2,000 to $3,000 for every car it sells in legacy costs, part of which are health care and retirement. It's nice that the workers have that, but if GM goes out of business then no one gets anything. It's a fine line you have to walk between taking care of employees and putting the entire company at risk when competing against global companies. Toyota is building factories in the US and they don't have to pay those same health care costs and you can see the difference in the balance sheets.

Like I said, it's a fine line...
dano2002 at 02:00 PM JST - 24th October

the average for GS is that high because the top 5% are raking in millions. back office may make 1/5 or less.
tkoind2 at 02:18 PM JST - 24th October

Superlib. We've seen in the rebuilding of Germany and Japan and in the New Deal that internal investment results in wealth generation.

The US infrastructure is in severe decline, we don't have adequate public transport and some communities need cleaning up. If we invest in doing these things, the $1 in will help generate jobs, demand and end up creating wealth and revenue for workers, business and taxes.

You are 100% that it has to be a balance. But what choice do we have? We cannot ignore the internal decline. And we need people to work instead of ending up on welfare. This is a good approach if managed well.

Skip; On energy. Same thing here. We need a national mandate to get this done. And that means looking at the ability to sell off excess personal power generation to the grid. Or at least earning credits for it. And we need to see the development of new technologies. There is an energy hungry world out there who are just as much in danger from Oil related issues. If we come to the table with solutions, we can be the leaders in this arena and reinvent our economy. Sure it will be hard, but so was life from 1929 and look where we got to with hard work and persistence. I believe we can do it.

But we need better education. And I'm not talking about only grade and high school. I'm talking about free college. Every kid willing and able to learn should have a chance at college, training or some post high school education. Every bright kid finishing college should be able to go on to get a higher degree. The pay back? 2yrs working in programs to pay back in community, small business etc... work. Higher degree. We up the stakes by asking that they contribute time, after their 2 year stint, to give services as instructors, mentors etc...

We need to build a sense of social responsibility. Not only in the US but everywhere.

Idealistic. Absolutely! Realistic? You bet! But it takes a change in how we see things. We have become confused that free commerce means no social responsibility. But in fact it can gain and benefit from more social responsibility. If we raise up more people in our society, business, tax bases and the creation of a strong competitive nation follow.

I don't see what other choice we have, except to continue our decline. If the forefathers could sacrifice it all to make a new nation, and our grandparents give up their lives to save the US in WWII, why can't we sacrifice to make the nation ready for the future and to reverse our decline?
skipthesong at 06:21 PM JST - 24th October

I going let you in on something. I have several friends who have lost their jobs working at some of the big ones. Each one of them took their time looking for the same, if not higher salaries than they got before. When you are a back office person, you should realize that you are not part of the profits, you are part of the expenses. Take what you can get.

tkoind: Let me ask you this since you hit on education. I got a lot of free training in the Army. Granted it was the medical field because that was what I thought I wanted to be involved in. That training, I am sure if I had to go on my own and pay completely myself would have been very expensive and probably would not have been able to pay myself. So, what do you think, like many countries, people join the military for say two or three years?
Lieutenant at 06:24 PM JST - 24th October

I going let you in on something.

Thanks man.
ca1ic0cat at 09:14 PM JST - 24th October

I have to have some sympathy for anybody who looses their job and I'm sure that the "expense" side of the business is going to suffer unequally. But welcome to the real world guys. We're all worried about our jobs.