With one breath local banking chiefs are assuring everyone jobs here are safe, with the other they're quietly telling staff to pack their bags.
Last week, Citigroup Australia became what may be the first of many banks to publicly let staff go. The struggling US bank retrenched around 20 staff in its Sydney equities and fixed income divisions, including members of its prop trading desk, just days after its local chief executive said the bank's 2,500 positions were safe.
In interviews last week, CEO Stephen Roberts claimed Citigroup actually planned to increase its Australian headcount this year despite the massive job cuts planned on a global level.
"It's definitely business as usual," Roberts told the Sydney Morning Herald. "If I look at what we're doing in terms of head count, we're increasing it - we're investing in our businesses."
Roberts added that no job cuts were planned as a result of the parent bank's massive fourth-quarter loss. Citigroup's US job cuts are expected to focus on its investment banking and trading divisions, but Roberts said these were stand-out operations in Australia.
Sources within Citigroup Australia say there were "heated discussions" with the New York office about redundancies in Australia. There's also talk of a hiring freeze.
"It's a case of Australia putting its foot down because there is strong internal pressure at the moment," the senior source said. "There is a huge amount of ambiguity about what's going to happen, but we'll be the last people to find out."
According to other bank sources, expectations are that bonuses within Citigroup will be down at least 10% this year even though the bank had a fairly good year in Australia.
Carmichael Fisher consultant Oliver Darkes says the bulk of redundancies will be centred on the US and Europe, but if past experience is any guide, they will eventually flow through to Asia and then Australia and other smaller offices. The 20 cuts to date may be the start of a trend.
Other banks are liable to follow in Citi's footsteps. Last week the Australian Financial Review quoted Craig Drummond, chief exec of Goldman Sachs JBWere, as saying that there would be pressure on banks to shed jobs if markets stayed weak. Things have deteriorated considerably since then.