Last week ended on a bad note for equities sales and trading professionals: it emerged on Friday that UBS and Barclays were both making equities redundancies.
This week has begun on a similarly troubled note. Over the weekend, Swiss paper Sonntag said it had spoken to Credit Suisse insiders who claimed the bank will reveal a further 1,000-2,000 redundancies when it announces its results later this week. According to headhunters we've spoken to in London, Credit Suisse's new cuts will disproportionately affect the bank's equities business. This makes sense. Credit Suisse has already cleared out 30% of its MDs in M&A and capital markets in Europe. It's already economized on structurers and pulled back from non-key markets in Asia. And it made a lot of senior FICC redundant around this time last year. The CS equities business remains ripe for trimming. Credit Suisse didn't return a request for comment.
Meanwhile, we have some more colour on the redundancies at Barclays Capital. We understand that last week's figure of 50 equities job cuts may be too high: it's more like 30. Barclays is mostly said to be cutting traders in both cash equities and equity derivatives. And - unusually - it's mostly cutting in Continental Europe rather than in London - suggesting the equities business is being re-centralized in the City. Barclays built its Continental European equity derivatives business in 2005 under Dixit Joshi who left in 2010. It hired in Richard Evans as COO of EMEA equities in August this year. Evans is understood to be one of the architects of the current cuts.
Barclays declined to comment specifically on where the cuts are taking place, but confirmed that it has begun a consultation process within its EMEA equities franchise.
“We continue to hire selectively across those parts of the business that are growing,” Barclays spokesman Marc Hazelton said in an e-mail.
So what should you do now if you lose your job in equities sales or trading?
According to one headhunter, not much. Although around 56% of RBS's equities professionals appear to have found new jobs since being let go in March, equities recruiters say the market has worsened considerably since then and that new jobs are very hard to find.
"There's no hiring," says Jason Kennedy at search firm Kennedy Associates. "The boutiques don't have any money and if you're let go there's not much you can do. Next year's going to be another dead year too. Anyone who gets made redundant now isn't coming back into the industry - ever."
Another equity derivatives-focused headhunter is a little less bleak. He points out that ETF Securities has recently hired Matt Johnson, former head of EMEA equity derivative sales for BAML. Similarly, Marex Spectron the world's largest independent futures broker, is trying to hire 70-100 front office people by July 2013. Citi has been hiring from Unicredit for Delta 1 trading and UBS has strengthened its Delta One business post-Kweku Adoboli by hiring Andrew Herman from Deutsche in May. There is some equities hiring, he points out. It's just very niche.
It doesn't take great genius to see why banks are cutting in equities. As the (US-centric) graph below, from KKR, clarifies, trading volumes have collapsed since 2009. Nor is there any sign of recovery.