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GUEST COMMENT: In praise of investment banking job cuts

When cuts are good (Photo credit: Wikipedia)

When cuts are good (Photo credit: Wikipedia)

So, UBS has been the first to break ranks and take the axe to its investment banking operations? It can only be a matter of time before another bank follows.

As a investment banking professional working in London, you might think that I would condemn the cuts. In fact, I welcome them. This industry has too long been a gravy train that has nourished generation after generation of clever but unremarkable individuals.

I only have to look around at the ranks of anonymous suits (myself included) at my employer to appreciate that the current situation is unsustainable. Everywhere I look, there are opportunities to cut staff – from the hapless yet cocky graduates handsomely rewarded for their fruitless donkeywork, to the scores of Managing Directors holding lengthy meetings and issuing endless decrees to justify their bloated salaries.

Already, the atmosphere has changed. Suddenly, front office people feel the need to justify their roles. In my firm, there haven’t been any slash and burn cuts, but there’s an increasingly intensive weeding out of under-performing staff and unprofitable or high risk desks. The focus has shifted: it’s no longer about maximizing market share, but managing the retreat.

If you work in the middle office, as I do, the pressure to cut costs is nothing new. Off-shoring and near-shoring have been with us for some time. At my previous employer both product control and operational roles were successively shifted to India, Singapore, and cheaper UK locations. Many of my then-colleagues fell victim to these changes. When given the choice, many opted not to move abroad with their roles. Unfortunately, this may be a decision they come to regret.

Comments (4)

  1. ah darlings, if only those cuts were to the flab and grease layers. They never are, especially with the big banks (OK so UBS caused a couple of charmers to fall on swords – I can imagine a tidy few who looked sideways as long as the money flowed towards them, honey). They are and always will be still in situ and creaming the big bucks while they’re a’coming in… Rogue traders? They all are. (the uber-nasty ones just never carry the can). Cutting costs? Never the biggies who suffer.

    Don’t believe me? Check out how many Swiss have been laid off by UBS as an ethnic proportion to others, in the last two to five years. And check out their payouts – if you can.

  2. “As a investment banking professional working in London” … you work in middle office and you brand yourself as if you know the front office. Give me a break, if front office suffering makes you feel better, fear not. Lack of revenues means less job in the whole bank, support included. Might be better to take your jealousy elsewhere and get on with your job. You wouldn’t even know when they let go people silently anyways, based on your generalisation.

  3. I stopped reading at “If you work in the middle office, as I do”.

  4. Looks like the Front Office boys are getting a little testy over this article, truth hurts. Yes, when front office gets cut then support functions suffer as well. However we support staff don’t entertain the same delusions of grandeur as our exotic high maintenance front office cousins. So when we lose our jobs we’re flexible and humble enough to consider a wide range of employment options just to get back in work and pay the bills. Whilst when you get the chop you sit at home licking your wounds, daydreaming just waiting for the call for that high paid job. But deep down you know the call will never materialise and deliverance will never come, hence all the bitterness.

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