Job cuts shake Wall Street nerves

By Dumeetha Luthra
BBC News, New York

The gloom is spreading on Wall Street

Wall street is in crisis.

The economy may not officially be in recession, but at this point that just seems like semantics.

The US's fifth largest investment bank; Bear Stearns has had to be bailed out.

Lehman Brothers and Citigroup - New York's financial royalty - are slashing jobs.

In Manhattan alone they have cut 5,000 and more layoffs are expected.

And as the big bucks go, so does the big spending.

The city is already feeling the bite.

Suddenly fired

Tiffany's and Hermes are the shops of choice for the uptown shopping elite, but if you ride downtown the brands have also expanded to take in the downtown swagger of the financial high rollers.

Last year this time it was a lot easier paying my bills, that's all I can say Phil, market trader

The boom years were good for everyone, the bust is already rippling through the city.

If you are one of the high earners, these are worrying times.

You could well be earning a six figure salary at the start of the day, and be out on the street at the end.

One such woman, we'll call her Sarah - she is afraid of repercussions, so does not want to give her real name - told me her story as we sat on a bench at the Trinity church just at the foot of Wall Street.

She had been working at one of the main Wall Street banks for several years, and having just been moved into the hedge fund department days before her boss had told her that her job was safe.

"I got a phone call from the head of the human resources department," she says.

"I was actually on a client call [but] I switched over to the other line when I saw who was calling me.

"I said to the woman; 'is this bad news?' and she said 'just come to my office'. I finished the client call, knowing several people had been laid off that morning.

"She walked me to the head of the hedge funds groups office where he then sat me down and told me due to reorganisation I was being laid off."

Big Apple hit

Sarah is pessimistic about the future.

The "golden balls" offer a sign of hope to Wall Street traders

"I have a sinking feeling that it's going to be probably quite a while before I find another job," she says.

"A lot of people [are] looking and [there's] not a lot of hiring going on right now."

The knock on effect for New York is significant.

Although Wall Street accounts for only 5% of the city's employment, it has fuelled more than a third of its recent economic growth, as a conservative estimate, according to James Parrott from the Fiscal Policy Institute.

"The revenues that Wall Street firms receive then enable enormous bonuses that have helped fuel the luxury real estate market in the New York metro area," he says.

"They also create a lot of spill-over demand in other industries: like professional services, law services and accounting firms.

"All of that for the last few years has been moving up, and has been expanding and increasing demand and jobs and now we're at the point where that is starting to unwind and go into reverse."

Hope and glory

You can walk from the buzz of Wall street just a few steps to enter another historic institution.

Delmonico's. It is one of the oldest restaurants in the country and has weathered several of the cities financial storms, although, as the manager Corado Goglies explains, it has not always gone unscathed.

"You definitely see a little decline probably in the lunch crowds because I think the companies have cut down on their expenses," he says.

"I think people are worried about their jobs as well."

Power is everywhere here. The quiet hum of suited conversations conducting world-changing business, or perhaps just drinking away present sorrows.

Some may even try a bit of lady luck outside.

Lengthy process

The bronze statue of a charging bull is a hint at so-called "bull markets" when everyone on Wall Street is optimistic.

It remains a symbol of hope.

Now its more private parts are rubbed for a bit of a change in fortune.

You can imagine they are looking pretty shiny at the moment.

Phil has run a market stall opposite the bull for the past two years, selling bags, gloves and pocket books.

He is noticing the crunch.

"Last year this time it was more money out here, but right now it's really slow," he says.

"Last year this time it was a lot easier paying my bills, that's all I can say. You can really feel it."

So from street vendors to legal services, from real estate to restaurants, the pinch has already started.

It will take months to gauge the full impact.

In the meantime, New Yorkers know they're tied to the ride.

Where Wall Street goes they will follow.