Traders Freak Out About How Bad Things Have Become On The Street
Job cuts aren't the only cuts hitting Wall Streeters at the moment.
Even those that manage to escape the layoffs, may find their compensation cut soon.
"Large Wall Street banks are starting to scale back compensation on trading desks as shareholders grow increasingly restless over weak returns," according to Reuters. "They are also cutting the pay of those they are keeping, scrutinizing expense reports and expecting even the most profitable workers to bring in more business for the same amount of compensation."
Analysts who cover the banks where trading is a big contributor to profits, don't see how cost-cutting measures will offset the poor trading that's plagued the firm's recently.
One analyst who covers the invesment banks, Brad Hintz, "said the big players must slash pay levels of managing directors by 20 percent to 25 percent, automate more trading and cut jobs," Reuters reported.
It's not just underperformers that will be spared if the trading desks don't start upping the profits: "Only the strongest traders will survive, [one adviser] said. "It's not a pretty picture. It's just, 'Eat what you kill.'"
Traders aren't ignoring the signs either. An ex-fixed income trader who just shifted into risk-management told Reuters: "It's tense -- everyone is constantly looking over their shoulder. I'm not expensing lunch, and I'm taking the subway home." Morgan Stanleybegan a crack-down on expenses earlier this year.