Subprime Writedown: Losses Per Employee

Here Is The City (London’s fastest growing financial website) put together a terrific chart: The Credit Crunch In Context.

It shows what the write-down losses work per per (wholesale banking) employee work out to be for each of the big banks and brokers.

The numbers are rather astounding:      


Company . . . . . . Writedowns . . . . . . Losses Per Employee
1. Mizuho Financial Group – $5.5bn in writedowns, 2,000 wholesale banking employees, $2,750,000 per employee.

2. Wachovia – $7bn, 3,900, $1,794,872 per employee

3. UBS – $37bn, 22,000, $1,681,818 per employee

4. Citi – $40.9bn, 30,000, $1,363,333 per employee

5. Bank of America – $14.8bn, 20,000, $740,000 per employee

6. Merrill Lynch – $31.7bn, 48,100, $659,044 per employee

7. Dresdner Kleinwort – $3.3bn, 6,000, $550,000 per employee

8. Credit Agricole – $6.9bn, 13,000, $530,769 per employee

9. Barclays Bank / Barclays Capital – $7.7bn, 16,200, $475,309 per employee

10. JPMorgan Chase – $9.8bn, 25,000, $392,000 per employee

11. Deutsche Bank – $7.6bn, 20,000, $380,000 per employee

12. SG Corporate & Investment Banking – $3.9bn, 10,500, $371,429 per employee

13. Morgan Stanley – $12.6bn, 38,050, $331,143 per employee

14. Credit Suisse – $6.3bn, 20,000, $315,000 per employee

15. Lehman Brothers – $6.6bn, 30,000, $220,000 per employee

16. Goldman Sachs – $4.1bn, 30,000, $133,667 per employee

17. BNP Paribas – $1.7bn, 13,000, $130,769 per employee

Astonishing . . .


An Incredible League Table – The Credit Crunch In Context
Here is the City, 17/05/2008

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What's been said:

Discussions found on the web:
  1. Jessica commented on May 19

    I hereby offer my services to any of the top 3 money losers for only $1 million per year. I promise to not come to work, to not do anything, to just cash the checks you send me.
    I will be a huge upgrade from your current staff.

  2. Rock commented on May 19

    This much money just evaporating. Physics says for every action, there is an equal and opposite reaction. I don’t feel like I’ve seen near enough reaction to the losses. This looks more like what you see at the apex of a zero gravity test flight. (I know, finance isn’t rocket science).

  3. Tom commented on May 19

    How many of the furloughed employees are the top “geniuses” who engineered the debacle with their financial “inventions” (designed to make them money at the expense of investors)?

  4. Simon commented on May 19

    I once had an argument with someone who stated that for every person who lost money in the stock market someone else made the same amount. I argued that this was not so and I stick to that assertion. Unless someone
    can persuade me otherwise.

    For example if it was determined that an asteroid was unavoidably going to collide with earth everything would be worth nothing. So value definitely can be permanently and irretrievably lost


    BR: Value can be lost — but that doesn’t nmean it isn’t being made up elsewhere.

    Take every transaction on a company’s stock, from IPO to dissolution. Line up every sale with the corresponding buy — kinda like double entry bookkeeping.

    What’s the net total?

  5. Philippe commented on May 19

    There is an easy expedient to alleviate the debt burden per employee “Increase the number of staff”

  6. BG commented on May 19

    No wonder a stock goes up when a Company announces cutbacks.

  7. BG commented on May 19

    On 2nd thought, maybe they should hire more employees to make this metric look better.

  8. Jim commented on May 19

    This makes me feel much less guilty when I use a little too much toilet paper at work.

  9. rickrude commented on May 19

    all these losses can be replenished by Bernanke’s printing presses. So I am not worried.

  10. VennData commented on May 19

    Have you ever seen a bunch of folks who need a union more? Not blue collar workers, but shirt-color-contrasting collar workers: “Liberty, Equality, Fraternity!”

  11. DownSouth commented on May 19

    ☺☺”all these losses can be replenished by Bernanke’s printing presses. So I am not worried.”–Posted by: rickrude | May 19, 2008 8:18:06 AM

    That is the most troubling part of this whole scenario–that the FED has decided by fiat, with no public discussion or input–to use taxpayer money to shore up some of these losses.

  12. Michael Donnelly commented on May 19

    BR: you might want to recheck this source

    For example Wachovia has 122,000 employees

    BR: Its per wholesale banking employee (I have it in parens above

  13. Kalama commented on May 19

    This ain’t thermodynamics either.

    I don’t understand feediddle of finance – but let me point out that there seems to be a huge misunderstanding on a couple of points.

    First, money is not a conserved quantity, unlike energy in the First Law of Thermodynamics. People can pour a whole bunch of cash into an asset. Asset loses value. Now there is a lot less cash. Shazam – money disappears magically. For a tradeable security, unless someone shorts a bundle (my understanding is that short contracts are a relatively small market) losses are a real evaporation of $$$. Please correct me if I am wrong.

    Also – this is less pertinent but really erks the membrane – the “health” of an economy is not quantifiable by a measure like trade surplus or strength of currency (necessarily), but is quantifiable by the sum multiplier, or how many times a dollar changes hands before it leaves a region or nation. With the advent of globalism and streamlined supply chains to regions of way cheap labor this is a concept that needs more discussion –

  14. Hugh Harmon commented on May 19

    That Wachovia employee number looks very low to me. They have that many people here in Charlotte and nationwide probably have 3 to 4 times or greater than the number given.

  15. cinefoz commented on May 19

    Based on the averages, I’m a little confused. Is American productivity declining or is European productivity increasing? Several foreigners are in the top 10. Personally, I think this is another example of the decline of the USA. Our slackers should have kicked serious European ass and taken ‘Old Europe’ to school. In a few years Europe may exceed the USA in professional incompetence in the financial markets. Then, what will we be Number 1 at?

    Well, at least our financial pros can still offer lessons in how to game the oil markets. Goldman Sachs bird dogs the price targets, and the markets aim for them in increments. Our crooks will always be the best.

  16. Jim Haygood commented on May 19

    From rickrude’s mouth to Ben’s ear:

    “WASHINGTON (MarketWatch) – The Federal Reserve said Monday it will auction $75 billion of 28-day loans at a minimum bid rate of 1.99% under its new term-auction facility. The TAF program is designed to inject liquidity into the inter-bank funding markets. Banks have been relunctant to lend to each other as they need to shore up their balance sheets in the wake of the subprime mortgage crisis. The auction will be held later Monday and the results will be announced on Tuesday.”

    NOW will you stop whingeing? LOL!

  17. wnsrfr commented on May 19

    Kalama, good point, the missing debit is to all the customers or vendors paid by the losing company. Like the advertising company that produced the sock puppet commercials. In the case of the structured debt, all the “winners” are as identifiable as individual letters in a shredded document, but include the real estate agents, the mortgage agents, bankers, etc.

    Hmmm, includes many of those employees that took big bonuses too.

  18. DL commented on May 19

    Given the bonuses that a lot of these guys got every year, the “writedown per employee” doesn’t seem so unreasonable (although it’s the stockholders who get taken to the cleaners).

  19. Gari N. Corp commented on May 19

    The Mizuho wholesale employee number looks a bit funky. Mizuho Corporate Bank has a little over 7,000 employees, I think, so might this number just include Mizuho Securities personnel? I think both might be counted as wholesale banking operations.

  20. Winston Munn commented on May 19

    Wow, let’s wait and see how much these numbers affect CEO bonus structures – not much is my guess.

  21. J commented on May 19


    Line up both sides of every sale, from
    IPO to BK?

    To me, it seems the only way it would
    be a zero sum game (to investors in the
    company) would be if the IPO price was
    exactly zero.

    Now, the company did get to abscond
    with the cash from whatever shares
    they conjured and sold, along the way
    to BK.


  22. Mark D. commented on May 20

    The IPO price doesn’t matter, but if the company issues dividends over its life time those would count, as would the uncompensated value of any general contributions to the arts and sciences, and so on.

    However, the economic value of a business enterprise is no doubt typically greatest relative to its employees, and second most relative to its customer base. The shareholders and the public sector probably typically rank third and fourth after that.

    I hope the companies mentioned here figure out how to align their compensation policies with their own long term interests rather than what are apparently the short term interests of their employees alone.

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