The markets are crowing about jobs growth Friday, and for good reason in financial services: The sector added 13,000 jobs in September — the largest monthly gain since March.
But digging deeper, the data shows more than half of that gain coming from the real estate industry amid an uptick in housing. The rest comes from “credit intermediation”, jobs also tied to housing, as that space originates loans for mortgages and credit lines. (Read More: Jobs Report Sparks Debate - Does This Change Anything?)
It’s clear Wall Street banks are no longer the fulcrum of financial industry jobs as they once were.
According to the Bureau of Labor Statistics, some 8.35 million Americans were employed by the financial industry at its peak in December 2006. That number stands near crisis-level lows, around 7.7 million now. Before the crisis, that low of a level hadn’t been touched since 1999. (Read More: Too Many Harvard MBAs Heading to Wall Street?)
And even though the industry has cut more than half a million jobs since the crisis, big banks say there’s more to do. Here’s where most of them stand:
• Bank of America is accelerating “Project New BAC” — a plan to cut 30,000 jobs and $5 billion in costs by 2014. The Charlotte, N.C.-based bank will cut 16,000 jobs by the end of this year.
• According to a source, Barclays is largely finished with headcount reductions, which were conducted en masse last year. That being the case, no expansion is planned.
• Citigroup is in the process of 4,500 job cuts, first announced in late 2011.
• To save $2.1 billion, Credit Suisse has said it plans to cut 3,500 jobs — most coming from its investment bank.
• Eyeing EUR 3 billion in savings, Deutsche Bank plans to reduce global headcount by 1900. The Frankfurt-based bank has also vowed to make structural changes to employee compensation.
• Goldman Sachs has earmarked 1,000 jobs cuts in an attempt to cut $500 million in expenses.
• Morgan Stanley is continuing its plan to reduce 7 percent of the firm’s jobs, or roughly 4,000 people.
• Last year, UBS announced it will cut 3,500 jobs by 2013.
JPMorgan , the outlier, actually has increased headcount since the crisis — but, its share price has also recovered the most.
For the rest, earnings don’t seem to be matching the levels of headcount and compensation.
For the banking industry overall, it would appear more job cuts are forthcoming if the environment doesn’t improve. (Read More: What the Jobs Report Really Say About the US Economy.)
According to the Bureau of Labor Statistics, financial industry headcount fell 7 percent between 2006 highs and the end of 2011. The Bureau of Economic Analysis found that earnings for the comparable period fell 17 percent.
And that’s not to mention investors’ return on equity, a perennial pitfall for banks of late. While the S&P Financial sector returns 17.6 percent on equity, on average, most banks are having trouble breaking out of the single-digit range.
—By CNBC's Kayla Tausche
— Jesse Bergman contributed to this article.