Investment banks are making plenty of redundancies. If it’s not Credit Suisse, it’s Barclays. If it’s not Barclays, it’s Morgan Stanley, or Goldman Sachs, or Deutsche Bank. Almost everywhere is cutting heads.
But how much can you expect when you’re let go from one of the world’s leading financial institutions?
Based upon the figures disclosed in bank’s European Pillar 3 remuneration reports, we can say with some certainty that when ‘registered’ employees are let go from investment banks, they are compensated amply. Average severance packages for people let go by Deutsche Bank, Credit Suisse, UBS, J.P. Morgan, Bank of America Merrill Lynch and Morgan Stanley in 2014 (the most recent year for which figures are available) are shown below.
In 2014, by far the most generous packages were paid at Deutsche. UBS and Credit Suisse look stingy by comparison.
** London only
London employment lawyers confirm that Deutsche Bank is along the more generous payers. However, Deutsche’s apparent generosity may be exaggerated by a more stringent definition of severance packages than its rivals. – Deutsche allocated its gigantic $667k (£470k) average severance payments to only four people in 2014, whereas UBS allocated its more modest $104k (£73k) to 1,667 people.
Philip Landau, a London-based employment lawyer who works with redundant bankers at Landau Law, said banks typically define severance pay as something over and above their normal redundancy payments. Redundancy payments usually equate to one month’s salary for every year of service, he added. Recipients of severance pay are therefore typically senior staff in exceptional circumstances.
Charles Ferguson, another London-based employment lawyer at law firm Spring Ferguson, said banks’ redundancy packages were traditionally one month for every year of service, but that some banks have cut this to just two weeks in recent years.