5 Years After Lehman: Wall Street Employment in 5 Charts

Source: James Lee.

This September marked the fifth anniversary of the collapse of Lehman Brothers -- an event causing thousands to lose their jobs.

In addition to the anniversary of the meltdown, September has been met with Citigroup (NYSE: C  ) announcing it would be laying off 1,000 employees in its mortgage division, Bank of America (NYSE: BAC  ) confirming it would be cutting 2,100 jobs in its mortgage unit, and Wells Fargo (NYSE: WFC  ) adding 1,800 job cuts to the 2,300 it announced in August. 

All of these cuts were attributable to the projected slowdown in mortgage originations, particularly those used to refinance homes as rates rise. 

The number of jobs in the financial sector grew by 20% from 1996 to 2006, compared to just 12% growth of total jobs in the U.S. as the economy boomed. The Bureau of Labor Statistics in 2007 projected that we would see 9.6 million people employed in the financial activities sector by 2016. Yet as we have watched the market collapse around us, they now project there to only be 8.4 million jobs in the financial sector by 2020, an almost identical number to what we had in 2006.

The dramatic rise and fall of those employed in the financial sector is seen below:

Source: Bureau of Labor Statistics.

While the financial sector has recovered from the employment lows seen in 2011, it still remains below the employment in 2003. This is radically different from the picture of the U.S. economy:

Source: Bureau of Labor Statistics.

Surprisingly, while the broader financial sector is below its 2003 employment, the same isn't true of those employed in real estate:

Source: Bureau of Labor Statistics.

As a matter of fact, the hardest-hit group is savings institutions, where employment has fallen by more than 25% over the past 10 years:

Source: Bureau of Labor Statistics.

The five largest banks by employees in the U.S. as of the most recent quarter are broken out as follows:

Bank

Employees

Wells Fargo

274,300

Citigroup*

259,000

Bank of America

257,000

JPMorgan Chase

254,063

U.S. Bancorp* (NYSE: USB  )

64,486

Source: Company SEC filings.
*As of 12/31/12.

The biggest banks haven't been immune to this trend, and while it isn't quite fair to compare their employment since 2003, or even post-Lehman as a result of the acquisitions, we can see how their employment has changed since the end of 2009:

 

Source: Company SEC filings.

Certainly in all of this we see the financial sector is improving from the depths of 2010 and 2011, but in all of this, there is still a long way to go before we can truly consider it a recovery.

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 28, 2013, at 1:49 PM, captaintodzilla wrote:
  • Report this Comment On September 28, 2013, at 1:51 PM, captaintodzilla wrote:
  • Report this Comment On September 28, 2013, at 2:20 PM, fingerlakes54 wrote:

    A full recovery of employment figures equal to 2008 should not be expected. The small investor took a hit on the chin so hard that it is unlikely they will be drawn back into US Markets or into US Owned Brokerages for possibly a decade. Te crash of 1929 keep Americans out of stocks until about 1968 or so. It took almost 40 years to get them back in the door after that terrible crash. People in that time period did not trust banks and would rather stuff their mattresses with cash. Some think that was comical--but was indeed the case. I see investor avoidance of US Banks and Brokerages. Though we know China cannot verify much of anything--they do have exchanges that their government wants to see succeed. Trustworthy actions by foreign banks and exchanges may just be the lure to get Americans to exit home grown banks and exchanges.

  • Report this Comment On September 28, 2013, at 6:21 PM, quasimodo007 wrote:

    the evil TEa and evil GOP congress take care of their mafia style Privilege Crooks of Wall street who get Huge Bonuses and Pay off the backs off hourly and Middle class and Poor Americans. GRREd and More is their Motto of the Evil GOP Privilege Crooks of wall street.

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