The festive period promises to be awfully gloomy, with several banks in Hong Kong laying off staff in the past two weeks. For some firms the November cuts will the final round, although some recruiters expect one more cycle before bonus payouts.
Chop, chop, chop
This week Nomura began cutting FIG employees in Hong Kong , following its first quarterly loss in more than two years, says a recruiter who asked not to be named. The full extent of the redundancies, however, remains to be seen.
Last week, HSBC also fired more staff. Although an earlier announcement of Hong Kong job cuts focused more on support functions, another anonymous recruiter told us the latest cycle includes front-office bankers as well. And it’s not just the junior to mid-level employees who are seeing their jobs disappear, a very senior professional in retail banking has also been axed, she says.
Other firms are also shedding staff. Citi has made 15 people redundant in corporate banking across Asia, including Singapore, Hong Kong and China. Credit Suisse has likewise culled jobs – about 48 FIG positions have been axed across Asia, say our sources.
“All about cuts”
One Hong Kong headhunter bleakly put it: “Now the market is all about cuts. No one’s talking about bonuses, especially if you are in structured products, where it’s been a very difficult market to make money. The banks are not hiring unless they have lost key people, but firms aren’t creating new roles or expanding desks at this juncture.”
Another recruiter says banks are anticipating substantial candidate moves post-bonus. “Firms now know how big the pie is. They know for a fact that there’s insufficient money in the kitty, so it’s impossible to make everyone happy. So while firms aren’t hiring right now, they have started to meet prospective candidates.” Some job seekers have also been open to meeting for coffee to explore opportunities for next year because of the market uncertainty, adds our source.
Could pay cuts be next?
A senior headhunter says he’s heard that Goldman Sachs in London has asked about 100 VPs to take a salary cut of about 40 per cent. The Guardian had earlier reported the firm had invoked a clause in its UK investment bankers’ contracts to lower pay. This was however expected to affect only those at MD and partner level.
It’s not unforeseeable that a policy like this could affect Asia. But as one of our sources puts it: “It’s still better to have a job for less money than no job with no money in this market. There’s not a huge amount of opportunities out there. So while the knee-jerk reaction would be to think ‘this is disgraceful’, it’s better to be calm and measured.”