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Morning Coffee: J.P. Morgan’s device for cutting costs in an investment bank. Goldman preparing to shift jobs from London

J.P. Morgan hiring freeze

A hiring freeze is all you need

Redundancies are baaaack. As we predicted in March, Nomura is making more layoffs. The Wall Street Journal reports that the Japanese bank will be informing people in both London and on Wall Street that they’re surplus to requirement this week – conveniently just before bonuses are paid.

Before Nomura lops off hundreds of its traders and salespeople it may, however, want to take advice from the banking analysts at J.P. Morgan. They’ve reportedly devised a plan for cutting an additional $2.2bn of costs from Deutsche Bank without actually culling any staff.  Like Jes Staley at Barclays, the analysts simply advocate not hiring: if you want to cut costs, you just need to stop replacing people when they leave. That, and increase the share of juniors in your workforce (as per Goldman Sachs) whilst cutting contractors by 10%.

Separately, the Wall Street Journal reports that Goldman Sachs is thinking hard about what happens to its new London office- currently under construction at Farringdon – if Britain exits the European Union. Following reports that the bank will happily keep some floors entirely empty, the Journal says Goldman is “mapping out” which jobs might be hit by the inability to “passport” activities into the eurozone from a headquarters in London. The most affected are likely to be derivative and currency trading jobs, which could move to Goldman’s office in Frankfurt, along with related risk and compliance staff.

Meanwhile:

Predictions of bonus collapse and mass layoffs in London. (Investment Week)

Sadly, the ECB has not revived European credit trading. (Euromoney) 

When adjusted for inflation, wages for investment bankers and securities-industry employees in the US, including salary and bonuses, increased 117% from 1990 to 2014. Wages for other industries rose 27%. (Bloomberg)

J.P. Morgan Chase trades at a slight discount to book. Citigroup and Bank of America trade at far steeper discounts, just below 60% of book value. (WSJ)

Ex-Barclays LIBOR trader says he only stood to gain $127. (Reuters)

Daiwa just hired a syndicate banker from RBS. (Global Capital) 

Credit Suisse hired a new head of Asian ECM from Macquarie. (Global Capital) 

If an alumnus finds you a job, you’ll earn 16% less. (Financial Times) 

You can be trapped onto a hedonic treadmill. There are three pathways. (Stumbling and Mumbling) 

A mathematician by training, he loves numbers. Statistics are his thing: ‘43 aliases, 89 phone lines, 25 companies’. (London Review of Books) 

Photo credit: Ice! by Sergio Morchon is licensed under CC BY 2.0.

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