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Nasty couple of weeks in store (Updated)

The next 14 days could be particularly black ones for investment banking redundancies.

“Next week will be very big for job cuts,” says the European head of one international search boutique. “Banks are putting the finishing touches to their cost cutting programmes this week, and will announce redundancies starting Monday 14th April.”

“European DCM fees have been squeezed,” says Lee Thacker of search firm Silvermine Partners. “Cuts are going to come over the next two weeks, and in the two weeks in June when quarterly reviews take place.”

Headhunters predict the biggest reductions at UBS and Citigroup – and Financial News reports that Citigroup is slashing its leveraged finance team from 27 to 14 people. However, they’re unlikely to be the only banks reducing headcount.

JPMorgan, Deutsche Bank and Barclays Capital are thought to be overstaffed in fixed income. Morgan Stanley and Lehman are expected to announce another round of redundancies in the coming weeks. Merrill Lynch has already let people go and has signalled its intention to eliminate more investment banking jobs in May.

Not the 1990s

However bad things are at the moment, though, they’ve been far worse in the past.

Andrew Burrell, chief economist at Experian, is predicting that anything between 10,000 and 20,000 jobs will go in the City of London this year. However, he points out that this is nothing compared to the 1990s when 50,000 to 60,000 jobs were eliminated from what was then a much smaller financial services community.

“Right now we don’t have the wider economic context of a UK-wide recession to create job cuts of that magnitude,” says Burrell.

And if conditions do deteriorate further? There will, at least, be small mercies.

“In the early 1990s the trains were half empty – you could always get a seat,” says one headhunter.

Comments (5)

  1. A word of comfort for some of you about to feel the axe blade: bonuses might have been lousy this year, but at least you’ve banked yours if you got one. Pity the souls who work like hell for a full 12 months and get told the week before bonus announcements that they’re out the door…so the employer doesn’t have to pay up. It will be tough if you hear you’re one of many losing their jobs, but if you keep a clear head and get yourself a good employment lawyer, you should be able to engineer a graceful – and hopefully satisfactory – exit. Good luck.

  2. How do you think the situation is going to be in Asia? Are the jobs being cut there as well? All these bankers should move to Singapore!!! Any ideas…

  3. Working for major IT firm. I had the option to take a bonus in December or risk the annual bonus to stay till April.

    I remember my father saying “a bird in the hand is worth two in the bush”. He was right; collegues who’ve stayed on got a zero bonus for the year!

  4. My heart really do goes out to all those people who are up for the axed. This goes to show you that we all need to saved for a rainy day. This goes to show you nothing bloom forever. Goodluck to all of you guys in finding work replacements. But just remember, we will be able to rise again.

    I know I sounded a bit chessy, but I just wanted to sympatize with all of you who are going through the Financial and Emotional strains.

    Look on the bright side, you still got you.

  5. Go have an early retirement if you banked several multi million bonuses during the last 5 years…

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