Mac the knife makes 1000 cuts

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Macquarie has slashed global headcount by 1,047 - from 13,898 in September 2008 to 12,851 in January 2009, according to an operational briefing from the bank released this week.

The firm admitted to $900m in write downs and other charges. This larger than expected loss, plus earlier write downs of $1.1bn, will slice its profitability in half.

"Like many financial services companies, Macquarie is shedding staff to adjust its cost base to the new revenue reality," says Troy Angus, portfolio manager with Paradice Investment.

Angus reckons that Mac's balance sheet still looks relatively healthy. "Unless there are some hidden write downs, Macquarie's foundations appear to be in good shape."

But the fear of future redundancies means more and more Macquarie bankers are testing the employment waters, according to one Sydney-based recruiter who asked not to be named. "The inflow of resumes is the highest it's been. Those in M&A and structured products would struggle to retain jobs in 2009, while debt and fixed income look reasonably safe," he says.

Another headhunter says the fund management space might also experience job cuts, however he believes the bloodletting will be relatively minimal. "Macquarie let plenty go in Q4 2008 and was pretty ruthless about it," he adds.

The Sydney recruiter says Mac bankers won't feel out of place if they take jobs at the Big Four. "The belief they're arrogant is a thing of the past, although the Aussie banks have a backlog of people in redeployment programmes who they might look at first."

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