Massachusetts Bracing for Loss of 7,200 Financial Services Jobs

Many large corporations and asset managers in Massachusetts are planning to cut jobs, and by the best estimates, the state could lose jobs for 4%, or 7,200, of its financial servcies workforce by the end of next year, slightly higher than an estimated 3% decrease in the rest of the nation, The Boston Globe reports.

Banks and mutual fund companies “are seeing big drops in the equity markets, and I think those types of firms are going to take a hit,” said Gus Faucher, director of macroeconomics at economy.com.

The financial and insurance industry, which employs 179,800, now accounts for 5% of the workforce in the state and has already laid off 900 people. At its peak in January 2002, it employed 188,200 people. But as the blowup of the Internet bubble took its toll, 14,400 people were given the pink slip.

On the bright side, said Alan Clayton-Matthews, an economist with University of Massachusetts at Boston, the cuts this time around will be shallower, and many people who work in financial services are highly educated, so they will probably land on their feet.

And, eventually, the stock market will recover, and many of those jobs will come back. Faucher predicted strong hiring to return to the financial services sector in 2010.

By comparison, New York expects to lose 35,000 jobs in the financial services sector.