With D.E. Shaw announcing that it's laying off 10% of its staff, it's becoming painfully clear that Wall Street, once again, is entering into a period of significant contraction in its workforce.  Layoffs at the big hedge fund - ~150 employees - are the latest cutbacks as the finance sector continues to grapple with lower profitability.  Industry analyst Meredith Whitney recently said 80,000 jobs could be on the line.  And, don’t even ask about bonuses for the survivors.  Elsewhere, Morgan Stanley asked its managers to hold off on new hires unless the position absolutely needs to be filled. 

The NYT's Nelson Schwartz wrote last week that, after an unusually sharp slowdown in trading this summer, analysts are rethinking their profit forecasts for 2010.  While the numbers won't be known until October, when Q3 earnings come out, the pace of trading this summer was slow even by normal summer standards.  Trading in shares listed on the NYSE fell 11% in July from 2009 levels;  August volume was off nearly 30%.   [NYT Dealbook, 9/29] 

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