Newspaper article THE JOURNAL RECORD
Securities Industry Has Low Spirits
Some said Thursday that the securities industry is slipping into its own private recession, even as its customers continue to enjoy the fruits of a historic seven-year bull market.
``We're in for a tough time, I think,'' said Robert Downey, a partner at Goldman, Sachs & Co. and the 1990 chairman of the Securities Industry Association, which is holding its annual convention here.
``I think we are facing a long period of change,'' John Gutfreund, chairman and chief executive of Salomon Brothers Inc., said in an interview.
Even as stock prices remained strong this year, brokerage firms have suffered from a litany of woes ranging from fierce competition, high overhead, and declines in such formerly lucrative business as arranging buyouts financed by ``junk bond'' debt.
By all accounts, the squeeze is nothing yet like the debacles the industry suffered in the 1930s or late 1960s and early 1970s, when securities firms and individual careers toppled in devastating numbers.
But layoffs are up and profits are down. On Wednesday, one of the industry giants, Shearson Lehman Hutton, announced a sweeping management shakeup.
Various estimates show securities industry employment down by some 30,000 jobs, or more than 10 percent, in the last two years, with more cuts in the offing.
And in an equally telling sign, the price of a seat, or membership, at the New York Stock Exchange recently has fallen below $500,000, compared to a Summer 1987 peak of $1.15 million.
``This industry is going through the same kind of restructuring that we saw in manufacturing in the early 1980s,'' said Robert Goodman, senior economist at the firm of Putnam Financial Services Inc. …