Managing directors at Standard Chartered in Hong Kong and Singapore face a nervous few weeks as the bank finalises plans to potentially cut hundreds of senior staff. MDs who don’t directly generate revenue – those working in operations or in strategic front-office functions – look particularly vulnerable to losing their jobs as the bank attempts to slash managerial costs, say headhunters in Asia.
Stan Chart is cutting 250 MD jobs globally, or 25% of its 1,000-strong MD workforce, according to Bloomberg. Our sources say that a large percentage of the cuts will be in Asia, where Stan Chart generates three quarters of its profit and where many of its business heads are based.
“While Singapore is a major hub for SCB, given the turmoil in China markets, the word is now that many of the Asian cuts could actually come from the Hong Kong office,” says one of the headhunters, all of whom asked not to be named because of client confidentiality.
Sources within Stan Chart in Asia say a few MDs have already been made redundant, but the complete list of layoffs is yet to be announced – meetings to finalise it are ongoing and the bank may reveal more details by the end of this month.
So far Stan Chart itself has made no announcement about MD redundancies in Asia. In July CEO Bill Winters tasked a new 13-member management team with developing a plan by year-end to address the future performance of the group. “When we announced the management team and organisational changes we indicated that there would be further personnel changes to come, as we simplify our organisational structure,” a spokesperson for Standard Chartered in Asia tells us. “This next stage of personnel and organisational change is a natural part of the process needed to reposition the group for growth. We have not set any specific target for headcount reduction, and we have no comment on speculation around individuals or individual roles.”
Headhunters say the Asian redundancies are likely to focus on Stan Chart’s 'business banking' division, which includes corporate finance, financial markets and transaction banking. Personal banking and private banking could be less affected – Stan Chart is currently trying to expand its wealth management headcount in Asia. Senior compliance and risk staff at can probably rest easiest of all – the firm still needs to build out its middle office.
The business-banking MDs most vulnerable to job cuts are IT and operations professionals and those in the front-office who work in strategic functions, according to several recruiters with knowledge of the bank. “These are leadership-focused jobs with no personal PNL, revenue-making or client-relationships responsibilities,” explains one Singapore recruiter. “For example roles in special projects, product-structuring jobs in financial markets, and strategy and planning jobs across business units.”
Winters is also merging regional jobs and reducing layers of management where there is duplication, according Bloomberg. “Those with direct local PNL should be safer,” says the Singapore recruiter.
While Stan Chart may offer new positions to some of the MDs, the majority may face a challenging search for a new role. “A lot of them will be forced to go to smaller, regional banks and some of the more expensive bankers could be out of work for a long time. The job market is more buoyant than last year, but the sheer volume will be hard to absorb,” says a Hong Kong headhunter.
A Singapore recruiter adds: “A number will be snapped up by Middle Eastern and Asian banks taking the opportunity to hire people with international experience. Some may also set up boutique buy-side advisory firms.”
“The trouble is that most of the major banks in Singapore and Hong Kong are well staffed at the MD end – demand is greatest at the senior associate/AVP level,” says a third recruiter. “Many of the departing people will move into the major consultancy firms given their significant appetite for experienced bankers.”
The recruiter says the MDs will also need to reduce their salary expectations. Stan Chart has recently been a good paymaster in Asia and has lured talent with lucrative bonus arrangements. “Since 2012 SCB has hired several very senior MDs on huge guaranteed packages over multiple years,” he adds. New employers are unlikely to be as generous.
The MDs won’t be short of money while they look for new jobs, though – we understand that their contracts typically offer redundancy payments of between six and 12 months’ salary.