Like a nasty virus, banking job losses have successfully crossed the species gap to afflict corporate financiers and equities bankers too.
Last week, Credit Suisse revealed plans to cut a further 350 jobs in fixed income and equities at its investment bank, according to Financial News. This was in addition to the 150 cuts it announced the week before.
also reported that Deutsche eliminated 70 people from its corporate finance division and that Morgan Stanley obliterated 1,000 retail brokers and asset managers (mostly in the US).
And even Goldman (yes it’s true) has been performing its annual cull of the bottom 5% of the performers, according to just about everyone and The Times.
The broadening cuts come alongside a report in the Telegraph that banking redundancies – rather than peaking at 8,000 as suggested last week by the CEBR – will now hit 20,000 (giving the impression that no one really knows where this will end.)
Shock and awe
Corporate finance headhunters say there’s shock at the redundancy contagion. “People are basically being fired,” says one, who operates at a senior level. “There’s quite a lot of surprise at who’s being let go – it doesn’t always seem the most rational decision.”
Lower down the food chain, however, it seems banks are less willing to slash junior corporate financiers, as they did in 2001 and 2002, but are satisfying themselves with paying poor bonuses in the hope juniors will get the message and leave of their own accord. “I’ve seen a couple of analysts in M&A at a leading US bank paid just 5-6k,” says Logan Naidu, a consultant at The Cornell Partnership. “It’s a real slap in the face.”
What’s a redundant corporate financier or equities professional to do?
Not a lot, apparently. “People aren’t hiring and by and large no one’s in a hurry to do anything,” says the corporate finance headhunter.
“Some of the better houses are still hiring junior corporate financiers selectively and PE funds are hiring selectively,” says Naidu. “But realistically, they’re not going to take someone who’s been let go.”
One option for corp financiers might be to make a dash for the middle market, which should prove relatively immune to problems affecting banks involved in mega-deals. “In the mid market area our feeling is that corporate buyers are certainly likely to be active,” says Stephen Lockley, a partner at Wyvern Corporate Finance.
And for equities professionals? There’s always Macquarie, Citigroup, or even Standard Chartered, which is rumoured to be contemplating building an equities business in London.