How many people does it take to operate a modern bank and how much should such a bank’s shares be worth? The one-two punch of recently announced lay-offs and stock price declines suggests that the answer to both questions is a lot smaller than you might think.

The numbers are staggering. As of midday on Wednesday, shares of Barclays and Credit Suisse, which announced lay-offs last week, are down more than 20 per cent for the month. Shares of HSBC, which will be making 30,000 redundancies – a 10th of its workforce – are down 17 per cent. Shares of Lloyds, which is cutting 15,000 jobs, are down nearly that much. Other financial institutions, including Goldman Sachs and UBS, have announced job cuts and suffered double-digit share price declines. And then there are Bank of America and Citigroup, the two banks facing the most intense pressure from investors this week; together they employ more than half a million people. For now.

Typically, job cuts are good for shareholders because they reduce labour costs and improve efficiency. But these lay-offs have set off a labour-capital death spiral: they are bad for employees but are proving even worse for shareholders, and the declines in the share prices of banks are putting yet more pressure on employees and will probably lead to more lay-offs. And so on, and so on.