Bank Layoffs Won't Be as Deep as 2008: Recruiter
Bank layoffs won't be as deep as they were during the 2008 financial crisis, hedge-fundrecruiter Ilana Weinstein told CNBC Friday. Those who remain, however, may see big cuts in bonuses—if they get one at all.
While all the banks are cutting—Bank of America said in September it may cut as many as 40,000 jobs—the CEO of IDW Group said 2008 was worse because banks overreacted.
"In 2008 I think banks overcut, and then they had to overhire in 2009 into 2010 for growth that didn’t end up being sustainable," she said.
Where there will be big cuts will be in compensation, Weinstein said. "It's not that expensive to keep people so long as you don't pay them, and I think there's going to be a lot of volatility" in bonuses, she said. Some might have a 50 percent to 60 percent cut, but she sees the average cut at more like 30 percent.
"The difference is, even though it is a smaller bonus pool, not a lot of it is locked up," she said, unlike last year when many bonuses were guaranteed and managers didn't have a lot of flexibility.
"This year I think they do [have the flexibility] and I think you’ll have people who are paid absolutely nothing and [the managers are] going to use that money to retain the producers that they really care about," she said.