As has been very widely reported this morning, UBS is making some more job cuts.
Last week, we suggested UBS needed to cut 1,108 jobs to get back to the level of investment banking headcount it had in 2008. In fact, it may have gone several steps further. UBS is reportedly cutting 2,000 IT staff across the bank and is reducing its IT budget by 30% (from CHF3.6bn to CHF2.5bn). UBS employs 8,200 technologists globally, meaning that 24% of them will be chopped. This will be painful – especially if you were of the opinion that technology in banking was a stable career.
The woman orchestrating the chopping is UBS’s CIO Michele Trogni. Trogni is reportedly being accused by UBS insiders of being a “crazy” and “impossible” woman. This may be true, but it also smells dubiously of sexism. Accusations of hysteria have long been a tried and tested method of putting women down: fearful of redundancy UBS IT professionals appear to be attacking Trogni however they can.
Separately, we’re late with this – but Goldman’s apparent PR campaign in advance of Greg Smith’s book launch is worth noting. Goldman PRs aren’t explicitly quoted anywhere, but the Financial Times published numerous articles last week in which it appeared to have had privileged access to senior bank insiders with direct experience of working with Greg Smith.
In one, it was pointed out that Smith, who famously decried the culture at Goldman as “toxic” in his resignation letter, had in fact given 13 of his colleagues the highest possible score for “culture and values” in their most recent appraisals. It was also suggested that Smith had an inflated opinion of his own worth: in December 2012 he informed his manager that he expected to earn $1m over the next year – even though he’d only earned $450k the previous year. This was clearly against the grain: as we noted earlier, Goldman appeared to reduce pay per head in London by 40% in 2011 vs. 2010.
In another article last week, the FT also reported that Greg Smith made it clear that he wanted to be promoted to MD in both 2009 and 2010 and that although he was a solid performer he didn’t make the grade. The FT cited an email written by one of Greg’s managers saying that he was, “off the charts unrealistic,” and had been told to, “tone it down.”
Nevertheless, ever-patient, ever-compromising, the FT suggests Goldman did its utmost to keep Greg happy. If Goldman couldn’t pay Greg $1m in his current job, the FT said it moved Greg into a different position (from US institutional sales to derivatives sales) where the bonus potential was higher. But greedy Greg Smith still wasn’t happy: within just two weeks he appeared to have clashed with his boss and left the firm. The rest is history.
It will be interesting to see if Smith’s book goes anyway to rebutting the accusations now being leveled against him. Goldman’s rebuttal suggests the firm is working hard at damage limitation – whether the man in the street takes any notice is another question.
Sergio Ermotti is fed up with UBS bankers leaking things to the press. (FinNews)
Some UBS managers are hampering Ermotti’s efforts to make big cutbacks, especially in investment banking. (Reuters)
Lucas Van Praag, ex-Goldman PR, has set up his own consultancy: LvP & Associates. His first client is Goldman Sachs. (Telegraph)
Government bond traders have escaped the cuts and their jobs are safe – as long as they’re adaptable and specialize in particular markets. (Reuters)
Actually, banks lost $120-$150m in M&A fees on the failed EADs-BAE deal. (Financial News)
Nomura is setting up a ‘virtual M&A team’-cum-M&A ‘ideas clearing house’ to discuss all cross-border ideas and dealflow. (Financial News)
Ex-JPMorgan rainmaker Ian Hannam has recruited a former SAS officer who’s fought in Afghanistan to run his company which will…look for gold in Afghanistan. (The SundayTimes)
Both Spain and the US fiscal cliff will cause jittery markets and therefore a lack of bank hiring for at least 3 or 4 months. (Reuters)
High speed trading firms are no longer in growth mode and have been cutting staff. (CNBC)
Jamie Dimon says JPMorgan hasn’t been cross-subsidizing growth markets “taking away” from people working hard elsewhere. (Seeking Alpha)
James Gorman,self-appointed visionary of Wall Street. (Bloomberg)
Hans Christian Reinhardt, an executive director and head of quantitative accounts in Morgan Stanley’s European electronic trading team, has left the bank. (Financial News)
Highly paid non-British workers in the UK contributed £117m to taxes last year, up 23% as HMRC goes after foreign financial services workers – especially those on dual contracts which enable overseas earnings to be taxed separately. (Financial Times)
A list of the world’s richest business people aged 40 or less. (CNN)
A global boom in offshore drilling means pay for oil rig workers has doubled. Some managers are now earning $500k a year. (Reuters)
The Swiss are preparing the army to help in the event of eurozone fallout. (CNBC)