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Wall Street Firms Bested by Credit Market Woes

DEBORAH AMOS, host:

And now to Wall Street, where there is more fallout from the high-risk housing loans; now jobs are on the line.

Yesterday, the investment bank Bear Stearns said it was cutting 310 jobs in its mortgage group, and Merrill Lynch fired two senior executives.

NPR's Wendy Kaufman reports.

WENDY KAUFMAN: So far this year, more jobs have been lost in the financial services industry than in any other. Pink slips have gone out to about 130,000 workers; more than half of them were employed by subprime or mortgage lending institutions. To put those numbers into perspective, the industry with the second largest number of layoffs is the auto industry, with about 46,000 job cuts. Yesterday's layoffs at Bear Stearns came just a day after Morgan Stanley said it would cut about 500 U.S. jobs.

John Challenger, the CEO of Challenger, Gray and Christmas, a global outplacement firm, says the job cuts on Wall Street won't end anytime soon.

Mr. JOHN CHALLENGER (CEO, Challenger, Gray and Christmas, Inc.): Just the numbers coming up - the big losses that have been reported by the major investment banks - portend further job cuttings as the year wears on.

KAUFMAN: Meanwhile, Countrywide, a major player in the subprime market, and one that recently slashed 12,000 jobs, has launched a PR campaign. Countrywide reportedly plans to give out green wristbands for employees willing to sign a pledge to, quote, "protect our house." And it's hired a public relations/crisis management firm.

Wendy Kaufman, NPR News. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Wendy Kaufman
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