Did you ever think about it before? Sure, we look for employment figures each month to get a handle on what the climate is for U.S. employment or unemployment for that matter but have you ever wondered what those figures look like for jobs on Wall Street? Even as the market surges to new highs, and investor sentiment follows suit, layoffs are happening. But it isn’t where you may initially think.
According to reports from Johnson Associates, pay for Wall Street employees is down 5 percent to 15 percent for equity sales traders from 2015 to 2016. In addition to this, the head count for traders in fixed income, equities, and investment banking are down significantly as observed from 2011 to 2016. This figure is lower by more than twenty percent during that period. This is according to business intelligence firm, Coalition.
Low volatility, low volume, tons of money leaving active management for more passive investing, in addition to the growing use of AI to trade stocks all equates to slower business. Among the leading ten global investment banks, these figures are in line with what has been observed. In a note from CNBC.com, an author states, “You can see the miserable state of the trading business in the results from companies like Virtu, one of the world’s largest market makers in stocks, bonds, commodities and currencies.”
But does this mean that everyone dreaming of becoming the next Bud Fox are over? Not necessarily. The traditional route, however, is most likely getting thrown out the window. According to UBS, the bank says that they are hiring people to fill positions in psychology, social media consulting, and computer engineering who are capable of writing code to execute algorithmic trading. So, now the focus may be more on smarts than it will be on cunning from floor traders.