Nearby businesses also worry they'll see some fallout from the layoffs at Wilmington Trust, whose employees represent a large core of consumers in downtown Wilmington.
"I hope we don't feel it, but I'm sure we somehow will," said Sean McNeice, executive chef at Chelsea Tavern on Market Street, which opened a year ago in March. "We need as many folks as we can down here to keep everything going. Plus, I've been a Delawar-ean, a Wilmingtonian, my whole life. I feel for these folks."
The job cutbacks also will serve as a psychological downer just as economic indicators seemed to be pointing up in Delaware and the nation.
Analyst Mike Bratus started this year with a bright outlook for Delaware's economy. He was forced to adjust his forecast abruptly.
Sudden unemployment will be a big blow to the individual workers, he said, and may delay economic growth locally. But, he said, he doesn't think it will be catastrophic to the state's recovery.
"Wilmington has lagged behind the recovery a little," said Bratus, an associate economist at Moody's Analytics. "This only darkens the picture a little more, but I think in the second half of the year, things will start to look better."
Still, the layoffs could reverberate through the broader economy in several ways, experts said.
A high-end job, such as a bank vice president, supports many other jobs in the local economy through retail spending, Bratus said. More importantly, the news could affect other workers' views of their own job security.
"If it weighs on confidence, it's going to weigh on spending, and that's going to affect retailers," Bratus said.
Many of the middle to upper managers caught in the Wilmington Trust transition will bounce back more easily and are likely to have more savings to cushion the setback than many of the workers in manufacturing or construction who have lost jobs since 2008, economists said.
Wilmington Trust's work force is educated and many have skills that will transfer more easily, even to companies outside the banking industry. But those new jobs may not be in Delaware and the layoffs may force some families to move elsewhere.
"The question for us in Delaware is will those people continue to remain in Delaware, paying taxes, spending money," said Charles Elson, director of the University of Delaware's Weinberg Center for Corporate Governance.
"They're obviously employable, but are they employable here? That's the big question. They may find something, but it's going to be a rough patch for them, their families and their friends."
The layoffs continue a long slide for the financial services industry in Delaware.
As the economy surged on the back of a booming real estate market, employment in the financial sector in Delaware peaked at 30,700 in early 1999. But mergers and the financial collapse of 2008 turned that around, and by the end of 2010 employment in that sector had fallen by nearly 5,000 jobs.
And the contraction still has not subsided. Earlier this year, HSBC announced plans to cut 500 positions at its New Castle office.
The industry is enduring structural changes, Bratus said, and the First State has felt the brunt of it because of the significance of finance in its economy.
Although disheartening, the news out of Wilmington Trust was not unexpected following the merger with M&T Bank, said John Stapleford, an economist at the Caesar Rodney Institute.
"Definitely disappointing, but not unexpected," Stapleford said. "I was hopeful, because M&T didn't have a big presence here, the losses might not be as bad."
Mass layoffs have battered various sectors of the state's economy since the recession began. Closures at the Chrysler plant in Newark, the GM facility near Newport and the Valero refinery in Delaware City have cost thousands of jobs.
Many of those lost jobs have yet to return.
BF Energy now employs several hundred contractors at the Delaware City refinery in preparation for reopening it this spring. The University of Delaware purchased the Chrysler site, but completion of a planned hub for research and development is several years off. Fisker Automotive plans to reopen the former GM plant but has not started any significant hiring.
Those sites will play a large role in Delaware's recovery, economists said.
Those manufacturing job losses also caused more disruption to the local economy when the employers closed. Workers in those industries have struggled mightily to find new work, in large part because they were less educated, with less transferrable skills, Stapleford said.
"I hope we don't feel it, but I'm sure we somehow will," said Sean McNeice, executive chef at Chelsea Tavern on Market Street, which opened a year ago in March. "We need as many folks as we can down here to keep everything going. Plus, I've been a Delawar-ean, a Wilmingtonian, my whole life. I feel for these folks."
The job cutbacks also will serve as a psychological downer just as economic indicators seemed to be pointing up in Delaware and the nation.
Analyst Mike Bratus started this year with a bright outlook for Delaware's economy. He was forced to adjust his forecast abruptly.
Sudden unemployment will be a big blow to the individual workers, he said, and may delay economic growth locally. But, he said, he doesn't think it will be catastrophic to the state's recovery.
"Wilmington has lagged behind the recovery a little," said Bratus, an associate economist at Moody's Analytics. "This only darkens the picture a little more, but I think in the second half of the year, things will start to look better."
Still, the layoffs could reverberate through the broader economy in several ways, experts said.
A high-end job, such as a bank vice president, supports many other jobs in the local economy through retail spending, Bratus said. More importantly, the news could affect other workers' views of their own job security.
"If it weighs on confidence, it's going to weigh on spending, and that's going to affect retailers," Bratus said.
Many of the middle to upper managers caught in the Wilmington Trust transition will bounce back more easily and are likely to have more savings to cushion the setback than many of the workers in manufacturing or construction who have lost jobs since 2008, economists said.
Wilmington Trust's work force is educated and many have skills that will transfer more easily, even to companies outside the banking industry. But those new jobs may not be in Delaware and the layoffs may force some families to move elsewhere.
"The question for us in Delaware is will those people continue to remain in Delaware, paying taxes, spending money," said Charles Elson, director of the University of Delaware's Weinberg Center for Corporate Governance.
"They're obviously employable, but are they employable here? That's the big question. They may find something, but it's going to be a rough patch for them, their families and their friends."
The layoffs continue a long slide for the financial services industry in Delaware.
As the economy surged on the back of a booming real estate market, employment in the financial sector in Delaware peaked at 30,700 in early 1999. But mergers and the financial collapse of 2008 turned that around, and by the end of 2010 employment in that sector had fallen by nearly 5,000 jobs.
And the contraction still has not subsided. Earlier this year, HSBC announced plans to cut 500 positions at its New Castle office.
The industry is enduring structural changes, Bratus said, and the First State has felt the brunt of it because of the significance of finance in its economy.
Although disheartening, the news out of Wilmington Trust was not unexpected following the merger with M&T Bank, said John Stapleford, an economist at the Caesar Rodney Institute.
"Definitely disappointing, but not unexpected," Stapleford said. "I was hopeful, because M&T didn't have a big presence here, the losses might not be as bad."
Mass layoffs have battered various sectors of the state's economy since the recession began. Closures at the Chrysler plant in Newark, the GM facility near Newport and the Valero refinery in Delaware City have cost thousands of jobs.
Many of those lost jobs have yet to return.
BF Energy now employs several hundred contractors at the Delaware City refinery in preparation for reopening it this spring. The University of Delaware purchased the Chrysler site, but completion of a planned hub for research and development is several years off. Fisker Automotive plans to reopen the former GM plant but has not started any significant hiring.
Those sites will play a large role in Delaware's recovery, economists said.
Those manufacturing job losses also caused more disruption to the local economy when the employers closed. Workers in those industries have struggled mightily to find new work, in large part because they were less educated, with less transferrable skills, Stapleford said.
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