New York City is home to more securities-industry workers than at any point in more than 20 years, but job cuts triggered by a banking-sector slump could put more of them at risk.
The city’s securities industry accounted for 195,100 jobs on average for the first eight months of 2023, according to a report New York State Comptroller Thomas P. DiNapoli released Thursday. He attributed the strength to a hiring surge in response to record profits in 2021.
But earnings and revenue have softened, in part because rising interest rates have weighed on deal volume. That’s prompted New York-based financial giants including Citigroup Inc., Morgan Stanley and Goldman Sachs Group Inc. to thin their ranks. The report cautioned that it “remains to be seen” if the industry will keep those jobs as profits decline.
“These are volatile times in America and globally, and Wall Street’s relatively stable profits and employment levels could change quickly,” DiNapoli said in a statement. “Further declines could weaken New York’s tax revenue from the securities industry and have repercussions for our state and city budgets.”
Wall Street’s first-half profits were down 4.3% from a year earlier, dropping to $13 billion and returning to pre-pandemic levels after two record years, according to the report. Tighter monetary policy over the past two years has contributed to a 46% decline in revenue from commissions and underwriting activities due to higher credit costs and a decrease in capital-markets activity. Interest expenses were seven times higher in 2022 than in 2021.
Wall Street contributed $5.4 billion in taxes to the city in fiscal year 2023, down 16% from $6.4 billion the prior year, according to the report. Almost three-quarters of it came in personal tax collections.
This article was provided by Bloomberg News.
