So, UBS has been the first to break ranks and take the axe to its investment banking operations? It can only be a matter of time before another bank follows.
As a investment banking professional working in London, you might think that I would condemn the cuts. In fact, I welcome them. This industry has too long been a gravy train that has nourished generation after generation of clever but unremarkable individuals.
I only have to look around at the ranks of anonymous suits (myself included) at my employer to appreciate that the current situation is unsustainable. Everywhere I look, there are opportunities to cut staff – from the hapless yet cocky graduates handsomely rewarded for their fruitless donkeywork, to the scores of Managing Directors holding lengthy meetings and issuing endless decrees to justify their bloated salaries.
Already, the atmosphere has changed. Suddenly, front office people feel the need to justify their roles. In my firm, there haven’t been any slash and burn cuts, but there’s an increasingly intensive weeding out of under-performing staff and unprofitable or high risk desks. The focus has shifted: it’s no longer about maximizing market share, but managing the retreat.
If you work in the middle office, as I do, the pressure to cut costs is nothing new. Off-shoring and near-shoring have been with us for some time. At my previous employer both product control and operational roles were successively shifted to India, Singapore, and cheaper UK locations. Many of my then-colleagues fell victim to these changes. When given the choice, many opted not to move abroad with their roles. Unfortunately, this may be a decision they come to regret.