The credit crisis has fueled significant job cuts in the banking sector, but bad news for some companies is proving a boon for others, say bankers and observers.

Robert Voth, a partner at executive recruiting firm CTPartners, said layoffs and the shuttering of some institutions is giving other companies access to executives they normally might not be able to hire.

"This is an excellent time to strategically upgrade," Mr. Voth said in an interview Monday. "Though it might seem counterintuitive, this is also an ideal time to build bench strength."

He said he is working with several senior executives who are interviewing for a number of openings, though hiring announcements are unlikely before next month. (He would not name the executives.)

Jeffrey A. Joerres, the chairman and chief executive of Manpower Inc., a Milwaukee research firm, said its quarterly survey scheduled for release today found that the majority of employers in a newly expanded "financial activities" sector expect to hold job levels steady in the first quarter as they wait to see whether the economy will fall into a deeper recession.

Mr. Joerres agreed that today's environment provides fertile hiring opportunities for some.

"There are a lot of relatively healthy institutions that didn't get too hurt with bad loans, that are actually doing just fine, and are actually still hiring," he said in an interview Monday.

Morgan Stanley, which recently became a bank holding company, seized an opportunity to obtain some banking talent after Wachovia Corp. was forced into a deal with Wells Fargo & Co. Cecelia Sutton, the longtime president of retail and small-business banking in Wachovia's general bank, is poised to join Morgan Stanley next month to run its fledgling retail banking effort.

William Losch, who had been the chief financial officer at Wachovia's general bank, has taken on the same role at First Horizon National Corp. in Memphis.

The Manpower survey shows that 71% of the financial sector's employers expect hiring to be flat next quarter, while 10% expect a decline, 15% expect an increase, and 4% are unsure. Manpower said the sector's net employment outlook — the percentage of companies planning to hire minus those expecting layoffs — was 5%.

The employers were surveyed during the first two weeks of October, after Congress enacted the $700 billion Troubled Asset Relief Program to bail out the financial industry, and before a number of high-profile layoff announcements by companies such as Citigroup Inc., Bank of New York Mellon Corp., State Street Corp., and JPMorgan Chase & Co.

The extent of the economic downturn was visible last week, when the Labor Department reported that the economy lost 533,000 jobs last month — the most in 34 years — after losing 403,000 in September and 320,000 in October.

Mr. Joerres said the financial sector appears to be adopting a "wait-and-see" stance on hiring while keeping an eye on the economy.

"While financial institutions and related industries have taken a lot of actions in 2008, they are now going to take a pause to see if they can get a clearer visibility of what's happening," he said.

The $1.1 billion-asset Columbia Bancorp. in The Dallas, Ore., is one of the companies being extra cautious. In September, it announced that it was shuttering its mortgage division and slashing about 18% of its work force in response to the housing slowdown in the Pacific Northwest.

"We're certainly not in a growth mode," said Terry L. Cochran, Columbia's president and CEO., said in an interview last week.

However, he also said that his company does not expect additional layoffs. "While nobody can foresee the economy, we really can't cut much more, or it will start to affect service levels."

Raymond P. Davis, the CEO of the $8.3 billion-asset Umpqua Holdings Corp. in Portland, Ore., says he see opportunities in the downturn.

In an interview last week, Mr. Davis said that his company has no plans to institute a hiring freeze, and that it may even pick up commercial lenders and deposit specialists from other companies.

"There may be opportunities to bring people on to generate additional revenues for the company, even though it might cost money" at the outset, he said.

Mr. Davis also said Umpqua is considering re-entering the merger and acquisition market. (See related story.)

Comparing Manpower's first-quarter outlook with the fourth-quarter one is hard, because the company changed its methodology to make it "more representative of the U.S. economy," Mr. Joerres said. The overall sample size was expanded from 14,000 to 31,800 employers for the first-quarter survey, which is now conducted in 201 metropolitan statistical areas in the United States and Puerto Rico.

In addition, Manpower redefined industry sectors — the financial sector now includes financial institutions, insurance companies, investment firms, financial planners, credit agencies, and real estate firms. In previous surveys, Manpower grouped only finance, insurance, and real estate companies together.

Though it cast a smaller net, the survey Manpower conducted in July showed similar trends. The fourth-quarter net employment outlook for the sector was also 5%. And two-thirds of employers in the finance, insurance, and real estate industries said they expected hiring to be flat in the fourth quarter, 15% planned to increase staffing, and 12% planned cuts. Another 6% were unsure.

Overall, for the first quarter the Manpower survey showed that 67% of U.S. employers expect hiring to be flat, while 16% expect an increase, 13% expect a decline, and 5% are unsure.

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