Brokerages laying off lots of staffKorean brokerage houses are slashing jobs as Europe’s debt crisis and the global economic slowdown bite into their profitability and their trading activities, sources said yesterday.
The total number of employees at 63 local brokerage firms reached 42,388 at end-March this year, down 0.7 percent from three months earlier, according to the data from the Financial Supervisory Service and the Korea Financial Investment Association.
This is the first decrease in the sector’s workforce since the second quarter of 2009, when the local economy was recovering from damages following the collapse of the U.S. investment giant Lehman Brothers in late 2008, they said.
“Brokerages have tightened belts to cope with cloudy market conditions since the first quarter of this year,” said an official from the Korea Federation of Clerical & Financial Union.
“The measures have included closing branches and merging business divisions, causing massive layoffs,” he added.
The number of temporary workers at the brokerages decreased 3.1 percent over the cited period, while the permanent workforce slipped 0.2 percent, the data showed.
In contrast, the number of executive-level employees in local brokerages increased by 6 percent.
Hit by a slump in the local equity market and increased costs, local brokerage houses have been stepping up efforts to cut jobs and sell assets to tide over falling profits, trailing their global peers’ moves.
Combined profit of eight major local brokerages is estimated to be 539.5 billion won ($478 million) in the first half of 2012, down 28.9 percent from a year earlier, according to FnGuide, a financial information provider.
Daily trading volume slipped 30 percent from a year earlier, sources said.