Some of the biggest names in finance have been forced to shed thousands of jobs from their banking, mortgage and brokerage arms amid the economic calamity roiling the world's markets. Even insurance companies, long a haven for money during bleak economic times, have become vulnerable.
They are traders, brokers, bankers, agents and back office professionals. Some commute on Interstate 78 through New Jersey each morning while others are employed locally. Regardless of where they work, they live, shop, play and pay taxes in the Valley and their future is far from certain.
"The scope of this credit crisis has expanded well beyond Wall Street," said Ryan Sweet, an economist for Moody's Economy.com. "Regional banks are under heavy pressure and credit card companies are feeling the squeeze. Nobody has been immune."
Brandon Jenzer of Williams Township is beginning to feel the pinch. Jenzer works for a financial services company in Manhattan and while the company so far has avoided layoffs, the 10-year veteran is feeling the angst.
When gas prices soared past $4 per gallon, Jenzer searched for a carpool to offset his commuting costs. And when financial companies started laying off workers, he became more frugal.
"Saving is important in case of those unexpected events, such as job loss, which is extremely evident in this economy these days," he said.
"I've cut back spending in terms of those items which I found I wasn't using as much, such as a home phone line, when I can use a cell phone," he said. "Saving, say, $20-$30 here and there can add up to a lot."
The tally of financial industry jobs lost nationwide this year had reached more than 129,000 by the end of October, according to Chicago-based job placement specialist Challenger, Gray and Christmas, which tracks layoffs. Add to that the recent carnage at Citigroup, which announced this month it will lay off as many as 70,000 of its 350,000 workers.
The insurance industry has lost 10,000 jobs. Real estate layoffs have added 1,500 jobs to the inventory, a conservative estimate that doesn't include agents who have left the business voluntarily due to lack of sales.
Various industry estimates put the financial sector job losses at 200,000 by the end of the year and as many as 350,000 by mid-2009. Overall, unemployment could reach 10 percent by the end of 2009, analysts say.
Financial companies are particularly vulnerable as their investments in subprime mortgages continue to tank, draining capital and consumer confidence. As losses mount, so do layoffs as cash-strapped companies struggle to stay above water.
"There is no question that the financial-services sector is far more widespread than just Wall Street, and the repercussions from the credit crisis stretch out all over the country to many different communities and industries," said John Challenger, CEO of Challenger, Gray and Christmas.
Challenger said that while financial jobs are particularly vulnerable, the ripples from mass layoffs will spread far and wide.
"The fallout is that some of the highest-paying jobs come out of the financial-services sector. Those jobs represent real consumer purchasing power in the community, and as people lose their jobs or get insecure about their jobs, they slow down spending and that damages the local economy."
The trickle-down effect may ultimately wallop the local economy more than the direct layoffs have, said economist Kamran Afshar. It doesn't take a layoff in the family to scare people into fiscal temperance, Afshar said.
"If, on your street, you see two people that have lost their jobs, that gives a cause for concern and people will cut back in their expenditures," he said. "For those whose income relies on those expenditures, they will get less of that, so they start to trim back as well."
Sandi Kegley used to be one of the Lehigh Valley faithful who commuted from her Fogelsville home to her job with insurance giant AIG in New Jersey. In 2007, she left AIG for an insurance company in Exton, Chester County.