Unsold Ferraris, no free drinks as crisis spikes
By Tony Munroe
HONG KONG (Reuters) - From office sodas that are no longer free to Ferraris that go unpurchased, financial services firms and their staff are being forced to a new era of austerity imposed by the global financial crisis.
"Canned beer is the new champagne," Oppenheimer & Co banking analyst Meredith Whitney told the Reuters Global Finance Summit this week in New York.
Financial firms worldwide have slashed more than 130,000 jobs in the current crisis, with thousands more losses expected as banks totter and hedge funds hemorrhage assets.
"To watch the financial industry change as radically as it's changed, to see the economy changing as radically as it's changing, you'd be offensively imprudent if you didn't change your spending," said Whitney, who became a Wall Street star for predicting the brutal times now confronting banks.
Wall Street bonuses could fall by 41 percent in 2009 -- a bigger drop than was seen following the attacks of Sept 11, 2001, the New York state Assembly said. In the City of London, the cash bonus pool is forecast to fall by nearly 60 percent this year , according to the UK's Center for Economics and Business Research.
Employers are also cutting back on perks such as business-class travel, while once high-flying dealmakers are reining-in the gaudy spending of the recent boom years.
Hugh Young, managing director at Aberdeen Investment Management, the Asian arm of Aberdeen Asset Management, said the firm is trimming costs amid a sharp drop in fees from managing assets so that it is not forced to cut jobs or salaries.
Coca-Colas in the office fridge are gone, he said. Continued...