More cuts ahead

Wall St. hit again
By MARK DeCAMBRE

Wall Street firms, having already trimmed payrolls by as much as 15 percent since 2008, are sharpening the layoff ax again, The Post has learned.

The second round of job cuts could start as soon as September, sources said, and could trim head counts by 5 percent to 10 percent.

This could amount to the loss of thousands of jobs in one of the city’s best-paid sectors.

September is a key month on Wall Street, as that is when firms start to complete their budget outlooks for next year.

Banks are being forced to re-examine their payrolls and trim costs -- even after a round of belt-tightening -- because interest rates are expected to remain low for the foreseeable future, putting pressure on banks’ ability to ring up revenues and profits.

The interest-rate fears come on top of worries that a sluggish market and uncertainty about the fiscal health of economies here and abroad are also going to prove a drag on banks’ earnings potential.

“Banks are looking at their 2012 budget, and in the near-term horizon, rates were going to rise [and they aren’t], and there’s renewed macro economic uncertainty,” said bank analyst Scott Siefers, at Sandler O’Neill, who sees a second round of jobs cuts in the 5 percent to 10 percent range.

Compensation of bankers and traders represents banks’ largest variable costs, eating into about half of its revenues.

“Cutting headcount is the easiest way to manage those costs,” Siefers said.

Big banks, including Barclays Capital and Bank of America, are expected to be among the firms gearing up for cuts.

Indeed, Barclays CEO Bob Diamond said that the bank expects to cut 3,000 jobs this year. So far the bank has already cut around 1,400 jobs in the first half of the year.

“You should assume this trend to continue and increase somewhat,” Diamond told reporters during a conference call earlier this month.

Other firms already have been slashing jobs liberally, including HSBC, which has said that it plans to cut as many as 30,000 jobs globally.

Goldman Sachs said that it plans on paring as many 1,000 jobs as it tries to achieve some $1.2 billion in cost savings this year.

Not everyone is predicting gloom and doom for Wall Street. Some feel last week’s wild stock market ride, one of the most volatile in recent memory, could mean big bonanzas at trading houses, given the increase in volumes.

Sanford Bernstein analyst Brad Hintz believes the bleeding on Wall Street may be nearing an end.

“We do not have an end-of-the-world phenomenon like we had in 2009,” he told Bloomberg TV during an interview yesterday.

Indeed, equity trading during last week’s roller-coaster week checked in at 14.5 billion shares, double the amount in the same week last year, according to research by Barclays.

Siefers says another factor banks are considering is how well the mortgages and other assets on their balance sheets are improving.