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French banks get heavy handed

Forget the 35-hour week and jobs for life, French banks are showing signs of Anglo-Saxon-style ruthlessness. So far it’s restricted to London, but it’s reasonably certain that people will be manhandled in Paris very soon.

Calyon and Natixis are most likely to do the roughing up. Les Echos reported on Tuesday that Marc Litzler, head of Calyon investment bank, is leaving – which is bad news for the 900 or so staff Litzler hired since last summer.

It also emerged that Calyon’s parent Credit Agricole plans to a) raise 4.7bn; b) do a UBS and pull back from investment banking; and c) cut costs by 10%.

Meanwhile, Natixis today also announced its intention to trim costs by 10% before 2009.

Predictably, jobs in the City will be first in the line of French fire. Headhunters say Calyon announced another wave of redundancies in its London structured credit team this week.

Parisian jobs are unscathed so far. “There haven’t been any redundancies in Paris yet,” says Guy De Brabois at Robert Walters. “London is more exposed at this point.”

This will change. French bankers weren’t left out of the hiring frenzy on the upturn, and will therefore be lucky to escape unscathed in the downturn. SocGen’s 2007 annual report shows that headcount in its French corporate and investment banking operation increased a massive 20% in 2007.

“Paris is an epicentre for the derivatives business,” says Simon Maughan, an analyst at MF Global. “It won’t be the case that French banks can dump a few staff in London and leave it at that. They’re going to have to act in La Défense too.”

Comments (4)

  1. Well there is a little more to this than meets the eye. None of the French banks have suffered anything like their UK or US or even German counterparts but they are reacting with similar percentages of job cuts. And don’t think that London will be bearing the brunt either. Those at the top are only too aware that the profit per seat is far higher in London than it is in Paris but no one thus far has been able to conduct sizeable sackings in Paris (read Europe) because of the Unions. However the Unions, in knowledge that something bad has happened in banking are aware that lay-offs will happen, and are now prepared to accept redundancies. So the boards are set to take maximum advantage of this window of opportunity to jettison the equivalent of a rain forest of dead wood that has been the French bank’s misfortune to have been obliged to continue employing. Yes its a lot easier to sack someone in London than it is on mainland Europe. But then that is one reason London enjoys being Europe’s financial centre. London will suffer no doubt but the silver lining is that, with regards to France, they won’t be alone.

  2. will somebody sack Bouton of Soc gen to begin with before we start with good people in london?h

  3. sack ’em. they’re all useless.

  4. I’m not sure the Bouton-like would be worried if being sacked, with their golden parachutes negotiated higher at each crisis.

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