The US financial sector is facing an epic round of layoffs that could hit 100,000 workers as the big banks wrestle with a global contraction and a sluggish economic recovery in the US, according to prominent analyst Meredith Whitney.
“We are on the precipice of a seismic down-sizing on Wall Street, the likes of which have never occurred before,” Whitney wrote in a recent research note to clients.
Whitney estimates that financial firms may have to slash at least 15 percent of their work force over the next 18 months to replace shrinking revenue.
Indeed, from peak to trough, employment in the securities industry declined 8.8 percent, or 76,400 workers.
Whitney, who made several prescient calls leading up the financial crisis, contends that US banks have become addicted to the housing market and peddling mortgage securities.
“Leverage became America’s greatest export,” Whitney wrote in her note to clients.
In addition, banks and the stock market have been benefiting from the Federal Reserve’s easy money policies to stimulate the economy, Whitney said.
“Because central bankers have done everything to avoid an economic slowdown, they have created a dangerous and highly inter-dependent global [interest] rates’ markets and policy has separated from reality,” the analyst noted.
Whitney’s gloomy report follows a rebound in bank stocks over the past year, with JPMorgan up 54 percent and Goldman rising 61 percent.
“Wall Street as we know it isn’t coming back,” Whitney told The Post.
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