Meredith Whitney, a former analyst at Oppenheimer & Company who now runs her own firm, predicts that securities firms worldwide will cut as many as 80,000 jobs in the next 18 months as revenue growth begins to slow.  The reductions, about 10% of current levels, will come after 2010 compensation payments, Ms. Whitney wrote in a recent report.  She added that industry payouts will be “down dramatically.”  Ms. Whitney, who started the Meredith Whitney Group in New York, came into prominence after correctly predicting Citigroup’s dividend cut in 2007. 

"The key product drivers of Wall Street’s revenues and profits over the past decade have been in a structural decline over the past three years," Ms. Whitney said in the report.  While regulatory reform, including higher capital requirements, will force some of these shifts, there will be a “deeper secular change” as a result of declining revenue in certain segments.

Recruiters last month said Barclays, Credit Suisse, RBS may lead a slowdown in hiring in Europe as the fixed-income trading boom fizzles out. Barclays Capital’s income from trading bonds and commodities fell 40% in the first half amid the sovereign debt crisis. Fixed-income, currencies and commodities trading was the biggest revenue contributor at investment banks from Deutsche Bank to Goldman Sachs.

Banks around the world cut 330,000 jobs during the latest financial crisis, according to data compiled by Bloomberg. Some have added employees recently as markets recovered.  While emerging markets will continue to expand, they will not do so fast enough to offset the declines in the United States and Europe, Ms. Whitney said.  [Bloomberg, 9/7].