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Redundancies big in Japan

Western banks have been taking the axe to their teams in Japan, and there is little sign that the blood-letting will end any time soon.

Much as in Europe and the US, fixed income positions have been taking a battering in Japan, point out recruiters.

“Morgan Stanley and Merrill Lynch have both made a lot of people redundant in fixed income,” explains one.

“Securitization was another area hyped up big last year but now the market is a bit of a shambles,” he adds.

Other recruiters point to the closure of Merrill Lynch’s commercial mortgage-backed securities team, which is thought to have led to between 10 and 15 redundancies last month.

There have also been strong rumours that Calyon, part of Credit Agricole, has frozen hiring on the real estate financing side.

According to some reports, Citigroup is poised to eliminate 10% of its positions within Japan as part of global cutbacks, with its Nikko Citigroup investment banking arm getting rid of as many as 170 of its 1,700 employees.

Credit Suisse is also thought to have cut around 10 positions as part of its plan to reduce its global securities businesses by around 500 people.

But, argues Marc-Karim Baloch, director at recruiter Akamai Financial Markets in Tokyo, it’s not all doom and gloom and there are areas of the market where there is still demand for talent.

“Even in this credit crisis, opportunities are arising. Demand for strong skills in distressed debt and assets banking is to be foreseen as bargains in the leveraged/consumer loan area are lurking,” he explains.

In investment banking, rather then M&A professionals, those with takeover bid experience are still in value, he adds.

Within equities there is demand for people experienced in equity derivatives and many banks are trying to beef up their asset management/wealth management operations, he suggests.

What’s more, even when bankers do fall on hard times, the fact that the Japanese financial services market is a relatively small, close-knit sector means that, assuming you have talent, it is often possible to pick up other positions.

“I know of one banker who was made redundant who, because he was so well known, got two offers in the space of two weeks, although that is probably exceptional,” he says.

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