Expect More Layoffs In Finance Next Year

There was some good news for the U.S. jobs market this morning but for employees on Wall Street it looks like 2012 will be another year of job cuts.

U.S.-based chief financials officers are planning to grow their respective workforces by 1.5% next year which could help lower the unemployment rate to 8%  at the end of 2012 from the current 9%,according to a quarterly survey from Duke University/CFO Magazine Global Business.

On the flip side, CFOs at financial firms expect modest workforce reductions next year, according to the survey. The same goes for CFOs of media companies.

There have already been many of those job cuts announcements from financial firms across the globe. Most recently Morgan Stanley said it would be cutting 1,600 jobs in the first quarter of 2012. Bank of America has plans to cut about 30,000 jobs by the end of 2012. Citi recently confirmed plans to kill off 4,500 jobs.

The good news is that there is a bit more optimism among U.S. based CFOs according to the survey which polled 1,050 CFOs from a broad range of public and private companies in the U.S., Europe and Asia. The U.S. CFO optimism index increased to 53 this quarter from 49 last quarter (based on a scale of 100).

The bad news is that they believe there is a 31% chance the U.S. economy will enter recession in the next six months. Those CFOs with a contingency plan (54%) say they�d slash their workforce by 8% and cut spending by 30% if a recession did indeed occur.

Meanwhile in Europe the debt problems are weighing on CFOs minds and books. Not surprisingly, the survey finds that many European CFOs believe their countries will soon enter recession or are already in a recession.

According to survey,  of the 90% of European CFOs who say the European debt crisis is negatively affecting their businesses, 45% describe the negative effect as significant. Meanwhile, half of European firms say it has become more difficult to borrow in the past year, and only 7% say it has gotten easier.

It seems 2012 will only become more strenuous as far as the Euro debt crisis goes. Fitch ratings said today it is considering downgrading Italy, Spain, Ireland, Belgium, Slovenia and Cyprus by one or two notches. The ratings agency revised its outlook on France to negative from stable but it affirmed its AAA rating.

Over in Asia CFOs are more optomistic than their European and U.S. counterparts but even their outlook has dimmed somewhat. According to the survey results, 50% of Asian firms say it�s become more difficult to borrow money in the past year while 75% say the Euro debt crisis is negatively affecting their business.

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