US
Banks that were hiring are now firing. There is a predictable symmetry between those who’ve been recently hired and those who are now being fired.
As the outlook worsens for M&A, recruiters say many of those being let go are associate- level investment bankers who were hired externally (either from MBA courses or as recently qualified ACAs) in 2010.
“I’ve seen junior M&A bankers who’ve been let go from BarCap, UBS, Nomura and Bank of America Merrill Lynch,” says one recruiter who places junior M&A staff. “The people coming to me seem mostly to be the ones who’ve joined banks laterally over the past two years rather than those who came up through graduate programmes.”
Bank of America is also said to be relinquishing senior M&A bankers as part of its London redundancies. This seems strange given its big push on building M&A in EMEA earlier this year and commitment to hire 30 new MDs.
However, conditions have changed since Q1. Thomson Reuters said this week that although EMEA M&A volumes rose 19% year on year in the first 9 months of 2011, there’s been a marked deterioration as the year has progressed. The third quarter was the worst since the start of 2010. Areas like utilities have been dead.
Moreover, some banks made more than others of the deal activity in the first half: Goldman Sachs increased its market share of competed EMEA M&A deals by 11.2%. Citi, UBS, Lazard, Rothschild and BarCap, all lost out.
If you’re one of the M&A professionals let go by a big bank, you may want to try your hand at a boutique. Moelis apparently intends to hire selectively next year. Greenhill and Evercore are said to be hiring too.
“Some boutiques still have a need at the moment,” says John Axworthy at J Robert Scott Executive Search. “But that capacity will be filled pretty quickly if a lot of people come out of banks and these market conditions continue.”
Separately, the tendency to hire and fire may be accentuated in future. Earlier this week, the UK government declared its intention to increase the qualifying period for unfair dismissal 1 to 2 years, starting 6th of April 2012.
I forsee a future in which being hired and fired multiple times in a few years is the norm. Contracts will be much lighter with shorter notice periods and bonuses will be smaller and more frequent. This increase in employee liquidity will be good news for everyone.
Nostradamus,
I’m not sure if that is the future as M&A is one of those businesses that requires continuity and stability to build strong client relationships. The same applies for the banks where you need to hire the right people to build competent industry coverage/specialist teams. High frequency hiring/firing is just not the right strategy to pursue.
The hiring and firing I’ve seen are more due to the worsening market environment. Young associate-level M&A generalists with no industry-specific skills are very likely to be let go. Young or newly promoted ED’s and MD’s who are stuggling to generate revenues are also in trouble.
I actually think the root of the problem is the large scale firings immediately after the 08-09 financial crisis. Banks that fired staff en masse scrambled for staff as the global economy recovered and we are just starting to experience the aftermath (how ironic that we are at the onset of another recession).
A lot of BB’s are lightening up because client activities have fallen to zero. Boutiques are in the same boat. They are either putting on a brave face or have only concentrated on MD and ED level hirings and are now hiring junior supporting