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Wall Street bonuses likely to tumble, job cuts to start in late 2020: report

Stock Markets Aug 10, 2020 08:15AM ET
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© Reuters. A man wears a protective mask as he walks on Wall Street during the coronavirus outbreak in New York

By Elizabeth Dilts Marshall

NEW YORK (Reuters) - Most Wall Street workers can expect to see their bonuses slashed this year and some jobs may be cut, according to a report published Monday by compensation consulting firm Johnson Associates Inc.

Banks are struggling to curb rising costs as shutdowns caused by the pandemic have put millions out of work, and forced banks to add billions to reserves in case consumers or business customers default on loans.

These costs are likely to hurt employee incentives, like bonuses, despite the recent rebound in U.S. equities markets, according to the report, which is closely watched by financial professionals.

Only traders and investment bankers who work in underwriting are likely to receive bigger bonuses in 2020, compared with 2019, according to the report.

Underwriters have been in high demand since March as corporations rushed to raise money during the pandemic, and traders have been handling record-high volumes of transactions as investors looked for opportunities in the volatile markets.

Conversely, workers in hedge funds, asset management, private equity and retail and commercial banking should expect incentives to shrink by as much as 30%, according to the report.

Layoffs could begin at traditional asset management firms and investment and commercial banking divisions later this year or in early 2021, as banks struggle to make a profit as the pandemic suppressed client activity and threatens to cause loan defaults.

Alan Johnson, author of the report, has said that layoffs this year could be significant. Companies were forced to make quick decisions and cut red tape during the pandemic, and they have recognized fewer employees are needed to do certain jobs, Johnson said.

Wall Street bonuses likely to tumble, job cuts to start in late 2020: report
 

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Comments (5)
Morne de Wet
Morne de Wet Aug 10, 2020 10:07AM ET
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This is bullish news
Andrew carson
Andrew carson Aug 10, 2020 8:52AM ET
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Come join the rest of us..
Noel Amparo
Noel Amparo Aug 10, 2020 8:43AM ET
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Sounds bullish I guess
Ronald Warren
Ronald Warren Aug 10, 2020 8:29AM ET
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The most important sentence was the last. "recognized fewer employees were needed" America us going to emerge from Corona, leaner and meaner. Less wasteful spending by consumers and less wasteful spending by corporate management. There's still from for several million jobs, but most are out of luck.
Ronald Warren
Ronald Warren Aug 10, 2020 8:29AM ET
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room not from, spell check
Ross Dre
Ross Dre Aug 10, 2020 8:20AM ET
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Oh but goldman snacks just upraded their 2021 outlook for the market. Ok goldman.... we’ve seen this pony show before.
 
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