Investment banks in Hong Kong usually wrap up any annual job cuts in the immediate period after bonuses are paid. Expect this year to be a more drawn out affair.
“Every single bank I have spoken to in Hong Kong recently will be doing further cuts later this year, if they’re not going through them already,” says Christian Brun, managing partner at search firm Wellesley Partners in Hong Kong.
International banks are facing lower trading volumes and increased competition from mainland firms on Chinese investment banking deals. U.S. banks in particular are likely to continue to trim jobs throughout the year, suggest headhunters.
Sarah Harte, an executive director at search firm Sheffield Haworth, says she expects “pockets” of job cuts throughout the year.
Most recently, Macquarie culled about 30 staff in Asia, including Hong Kong.
And while so far this year most Hong Kong redundancies have been in equities trading, the Macquarie cuts also affected investment bankers. “Macquarie is struggling with its IB business in Asia – it’s not profitable and Australia is losing patience subsidising it,” says Brun.
Investment bankers at larger firms won’t be immune from layoffs in the second half of this year either.
“Even Morgan Stanley – which is probably doing the best of all of them in Asia, mainly because of its strong M&A franchise – will cut investment bankers in Hong Kong,” says a headhunter in the city who asked not to be named. “Banks managed out of the US are more at risk because HQ will just look at Asia as a numbers game in the current down market and not give bankers much slack.”
Goldman Sachs and Bank of America Merrill Lynch are also expected to make layoffs deeper into the year than they usually would, says another headhunter with knowledge of the US banks.
Job losses at most European firms should be smaller as some have made sizeable cuts already (Barclays, BNP Paribas, Deutsche Bank, for example), while others have expansion plans in Greater China (Credit Suisse, HSBC).
“Across all banks, M&A teams in the resources sector may be vulnerable, especially within metals and mining,” says James Stokes, an executive at headhunters Anton Murray Consulting.
Meanwhile, banks in Hong Kong have yet to complete their weeding out of expensive and underperforming senior staff – this ‘juniorisation’ trend started late last year.
Brun from Wellesley Partners says upcoming cuts will mainly target “directors and MDs who are not producing revenue”.
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