6 months ago • 2 mins
What’s going on here?
Citigroup sliced 5,000 jobs last week, signaling that Wall Street’s still being very frugal with its coins.
What does this mean?
Stock markets are pumped and IPOs are cropping up again, so you’d think Wall Street would be ready to party. Not quite: 11,000 workers have been given their marching orders, partly because a struggling Wall Street added too many new names to its books over the last couple of years. Some big-name players, though, are trying to hold onto their number crunchers, cutting costs by not replacing folks that leave or retire out of choice. So even though the investment banking sector’s in a bit of a lull, that’s a sign some firms think the party’s only on pause.
Why should I care?
For markets: Put the fancy cufflinks away for now.
Companies have been shaking hands on a lot fewer deals lately, leaving boardrooms crying out for some Succession-style action. But because those deals are usually funded with debt, they’re a lot more expensive to pull off now that interest rates are up at neck height. So even though the market’s in a heady spot, investment bankers will be waiting until it’s that little bit cheaper to sign the dotted line with their personalized fountain pens.
Zooming out: Alexa, play “Dolly Parton, 9 to 5”.
Here’s a riddle: big banks, Big Tech, and everyone in between seem to be shedding jobs this year, yet unemployment in the US is at record lows. Here’s what gives: for one, most workers toil away for small, slimmer, private companies that are less pressured by thirsty-for-profit shareholders. And for another, the labor participation rate – that’s the percentage of folks who can work and have a job – is at a 40-year low if you strip out the pandemic years. Since unemployment’s down low, you can assume a lot of Americans are simply choosing freelance hustles over slaving away for fat cats.
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