Though Citigroup has recently announced layoffs in its municipal securities operation, most of the municipal finance industry is expanding employment.
On Tuesday, chief executive Vikram Pandit announced the layoff of 4,500 workers, affecting about 2% of the company’s workforce.
Of the 4,500, around 900 are from Citi’s securities and banking section, according to a company source. Out of those 900, about 25 were involved in municipal securities. Some of the employees have already been let go and most of the rest will be laid off by the end of this year, the source said. Citi has a public finance division in its municipal securities section. Nine employees are being cut from the public finance division.
When the economic downturn hit in 2008 and 2009, many of the larger firms in the municipal sector were laying people off. Smaller firms hired some of the Citi employees.
The Citi layoffs are part of a new series of layoffs affecting the U.S. financial industry since May. Bank of America Merrill Lynch, Goldman, Sachs & Co., Wells Fargo, Bank of New York Mellon and many European banks with offices in the United States have announced big layoffs.
The New York securities industry lost 4,100 jobs from May to August 2011, according to a report from the state comptroller. The sector could lose an additional 10,000 jobs by the end of 2012, the report said.
Deutsche Bank is engaged in a strategic review of its global asset-management divisions. It is unclear how that may affect the public finance employees within the U.S. branch, a source at the bank said.
Bank of America has announced that it would cut 30,000 employees by the end of 2012. However, none of the layoffs are expected to be in the public finance area, said spokesperson Kerrie McHugh.
Similarly, despite its overall layoffs, Wells Fargo has not been letting its public finance professionals go. “We’ve publicly stated we like that business,” spokesman Ancel Martinez said.
He believed there were no layoffs planned, adding: “Our deals are up. We’re doing well.”
While Goldman Sachs has recently announced it was cutting 1,000 employees, it’s not breaking down the layoffs by unit, according to spokesman Michael DuVally.
When Fred Solomon, senior manager of external relations at PNC Financial Services Group, was asked if there had been any layoffs in public finance, he said, “We haven’t announced any staff cuts this year.” Employment-wise, other firms have been stable or slightly positive for the year.
Robert W. Baird & Co. hired a public finance banker in Portland, Ore., this year, said Keith Kolb, managing director of public finance. In the coming months, it plans to hire municipal finance professionals in San Francisco.
The number of employees in public finance at JPMorgan is up this year compared to last year, a JPMorgan source said.
De La Rosa & Co. has hired some senior people in the last 12 to 18 months, said president Edward De La Rosa. The firm plans to do additional hiring in the next six months, he said. The firm exclusively operates in California.
Public finance firm Roosevelt & Cross Inc. has added a few employees since last year, said senior vice president Herman Charbonneau. It currently has about 70 employees.
Piper Jaffray & Co. has also been in hiring mode.
“For the first nine months, we hired 10 new senior bankers in our public finance business,” said Jennifer Olson-Goude, managing director of investor relations and corporate communications.
In 2010, Ramirez & Co. added 27 employees, and so far in 2011 it has added 12, said chief executive officer Sam Ramirez. Some 80% of the firm’s business is in public finance.
BMO Capital Markets has also been expanding, according to managing director Justin Hoogendoorn. “We think there’s a great opportunity where others are cutting back,” he said.
Loop Capital Markets also continues to grow. “We’ve been in expansion mode almost since we were born in 1997,” said Chris Mier, chief strategist and director of the analytical services division.
Every year, Loop has had more employees than the previous year, and in 2012 it expects to continue to add to its staff, he said.
