The change has come very suddenly. Chris Cartwright at City Executive Consultants says: 'There has been a total block on recruitment in a number of houses. It's all happened quite quickly, in the last month or so.'
The past month has seen a swathe of lay-offs at investment banks with emerging market exposure. Banco Santander, Spain's largest bank, announced on Friday that it was cutting 300 jobs globally, including 70 in Asia, to cut costs. Last year Banco Santander bought bankrupt Asian brokerage Peregrine Investment to give itself an Asian presence, and it has now decided it is time to cut its losses. Nikko Securities has slashed jobs in Taiwan, Hong Kong, Singapore and Malaysia and Warburg Dillon Read has made redundancies in 10 Asian offices.
In Russia the situation is equally bleak with Brunswick, which was bought by Warburg Dillon Read a year ago, cutting 80 of its 240 employees in Moscow and Regent Pacific, which did most of its business in Russia, letting 40 of its 100 staff in Moscow go. MFK-Renaissance, a Russian investment bank, has cut at least 50 jobs, with some recent reports putting the figure as high as 170. Cartwright believes these could be just the tip of the iceberg: 'We suspect that there are a lot more on the way.'
Rumours circulated that Merrill Lynch was shedding around 350 jobs, though they were vigorously denied. Merrill has, however, put a global freeze on new recruitment. One headhunter said that Merrill was not totally freezing recruitment, just that it was easier to slap down a ban and then process essential cases individually.
The extent to which the freeze applies to recruitment for developed markets is less clear. Cartwright said some mandates had certainly been put on hold, in some cases formally, with edicts coming down from senior management, and in other cases informally, with managers deciding that they can do without an extra person, at least until some stability returns to the market. Another headhunter countered that no existing searches had been cancelled.
The case would appear to be that investment banks are pushing ahead with essential recruitment, but are putting non-essential recruitment on ice. Whatever the case, it would appear headhunters are heading for leaner times.