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Editor’s Take: The great investment banking non-firing spree

So you thought investment banks were decimating their workforces with all the ferocity of Vlad the Impaler during a psychotic interlude? So did we. So did everyone. But a confluence of recent events suggests this might not be as true as the quantity of ex-bankers hanging out on street corners suggests.

Event number one: Credit Suisse’s Q2 results. When Credit Suisse announced its 2Q results last week, it also revealed – rather unexpectedly – that headcount numbers in its investment bank were up 1,200 on the previous year. Yes, it had cut 100 investment bankers between Q1 and Q2, but it’s hardly up to impaling standards.

Event number two: Deutsche Bank’s Q2 results. The German bank may have written down another €2.3bn and made a €311m loss in its securities unit, but that doesn’t mean it’s viciously extracting staff. Between Q1 and Q2 of this year, Deutsche removed a microscopic 25 people from its corporate and investment bank.

Event number three: Lazard’s Q2 results. Revenues in its advisory business were up a massive 37% in the second quarter, and Bruce has indicated an intention to hire new people and open new offices. This is not to say Lazard hasn’t been wielding the axe: it eliminated a truly shocking three managing directors from its advisory unit.

Event number four: Mack’s mad moment. Morgan Stanley is investing $1bn in
extra staff. What more can we say?

Event number five: The new man at Caz. Naguib Kheraj has indicated an urge to lead Cazenove deeper into areas like commodities and rates. Evidently JPMorgan will provide some of the manpower here, but hiring can’t be discounted.

Obviously, there is pain. Merrill Lynch, for example, cut 2,300 people between the first and second quarters of this year (but still had 1,900 people more than at the end of Q107). But the pain is not equally distributed. And if hiring is equated with pleasure, there are definitely pockets of it to be had. Vlad is unquestionably lurking, but so far he’s proven relatively benign.

Comments (12)

  1. Yep. The economy’s booming. Jobs for all. We’ve never had it so good

  2. Well,if they are not firing,,they certainly don’t appear to be hiring right now!

  3. Don’t think this analysis is very accurate – There have been redundancy at MS, Lazard, Goldman… (without mentioning UBS and many others)
    and some of them are still talking about a 3rd round in September.

  4. There’s no ‘timeframe’ for redundancies. Come the new financial year there could see a mass round of firings. Staff aren’t important. Shareholders and the bosses are. If shareholders see staff being ‘killed off’ the share price may go up.

  5. I agree that they are not firing so much as they should probably do in order to make profit… but in the current situation 30% of the people of a single class dont get promoted to the next class, and 30% of the people got an almost zero bonus…
    the truth is that they are not firing, but at same time they are not paying bonus and not promoting…
    this is due to the fact that banks are bankrupt, so in order to survive thay have to cheat on shareholders and employees…
    Bottom line, you work 15 hours per day for 10 per hour… and meny people say thanks too…

  6. Sure.. economy is stronger then ever.. IB mandate are flowing in daily like the waves in long island.. no real reduncies – all bad negative talk.. all the people out on the street just want a change for personal reasons as timing is right…

    get real Sarah. Sorry, sonebody who states 25 people at Deutsche (just to pick one) has absolutely no idea what is going on in the city etc.

    More and more leading economists and allocation strategists are becoming clearer (incl. the one at our firm and he is F… good) that this is the deepest and most severe crisis since the thirties. It is just so difficult to grasp due to the economic complexity that takes time to feed through the measurements..

    The US is far from being through.. if you would do the homework, which you actually should have done, you will find out there EVERY DAY a small or mid-size financial institution is going bust. There are trackers on the web.. or if that is too sophisticated, just travel the states AND LOOK!!

    so business in asia,ME is fine, but the US and increasingly Europe will need at least another year.. any many of us will not enter the next cycle.. just as 01/02..

    sorry, just a reality check..

    hanging in there Reply
  7. what a poorly researched article. I can assure you DB let go more than 25 people in q2

  8. Tim – Deutsche Bank did let go of a lot more than 25 people across the organisation as a whole. But in the corporate and investment bank headcount went from 15,638 to 15,613 between Q1 and Q2. See for yourself – page 7 of the financial supplement to their annual report (http://www.db.com/ir/en/download/FDS_2Q2008.pdf).

    Sarah, Editor, eFinancialCareers Reply
  9. Guys, total headcount has almost nothing to do with redundancies…

    how many do you have to let go to just make up for the incoming associates and analysts, which hv been hired months ago.. again pls do research and do advertise PR webpages..

    hanging in there Reply
  10. Sarah, am sorry to see how much lack of tact and touch of diplomatic style there is in people’s comments. Thanks for informing the rest of the community of what is going on, and what the color is in hiring trends within our industry is… regardless of how precisely accurate it is. Keep it up.

  11. But hang on you quote just DB, MS and CS as not cutting that much. And while you balance it out with Merrill, what about Citi, RBS/ABN to come, Bear/JP, UBS, Dresdner, Lehman. I actually prefer the good news stories but it needs to be balanced too.

  12. Regardless of the accuracy of the article, it is good to read something positive for a change. Better than the BBC who seem Hell bent on talking us into a recession.

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