(NEW YORK) — The industry that America loves to hate or envy may have a tough summer ahead, especially for its highest paid executives.
Reports indicate Wall Street firms are far from recovering the numbers lost during the financial crisis and may impose additional layoffs this summer or in coming months.
Due to uncertainty from the European fiscal crisis, the stock market has seen much of its gains from the year disappear. Goldman Sachs and Morgan Stanley may lay off workers in the coming weeks as the European financial crisis continues to affect U.S. markets, the New York Post reported.
Though the Dow Jones Industrial Average closed up 0.22 percent on Tuesday to 12,128, the index had four prior days of declines as world leaders discussed the possibility that Spain and Cyprus will need financial aid.
Brian Foley, pay consultant and managing director of Brian Foley & Co. in White Plains, N.Y., said the recent reports of 50 layoffs at Goldman and 100 at Morgan Stanley, “if true, are certainly very tough on those laid off, but they are too small at present to make for a broad significant new downturn by themselves, given the size of the firms in question.”
Morgan Stanley, which has about 62,000 employees, already cut its staff by 2,935 in the year that ended on March 31.
Mary Claire Delaney, spokeswoman for Morgan Stanley, declined to comment.
Goldman Sachs reportedly laid off 50 employees last week, many of whom were managing directors who make a base of $500,000 and receive an annual bonus, the New York Times reported. Goldman Sachs reported it had 33,300 employees, including consultants and temporary staff, at the end of 2011.
At this stage, Foley said layoffs “will continue to generally be done on an ‘opportunistic’ basis here and there” in “smaller lower-profile waves,” with some exceptions.
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Jethro Mullen Ivana Kottasova and Patrick Gillespie, CNN
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