It's happening again. Banks are cutting costs. And this time they're not just tinkering at the edges - they're going for wholesale dismemberment. Witness Credit Suisse, with its 30% staff cuts in London. Witness Deutsche Bank, which said to be contemplating getting rid of anything from 40% to 53% of its total staff. 'Optionality' is over. It's all about focus and efficiency - banks can't afford to linger in unprofitable business areas hoping that they recover, one day.
In the circumstances, how can you protect yourself from the coming fury? This is our advice.
When costs are being cut by a new CEO, the first people to go will be all those associated with the previous regime. Bill Winters' removal of a whole generation of managing directors at Standard Chartered was a version of this. So was John Cryan's removal of Anshu's army at Deutsche Bank. Tidjane Thiam has promoted people like him at Credit Suisse.
Christopher Wheeler, the venerable banking analyst and finance industry commentator, said that when line managers in banks are faced with the need to fire equally talented people, they go for those who are most troublesome to them.
"If everyone's equally good at their job, managers will get rid of the people who are the most disruptive," says Wheeler. "When push comes to shove, the boss will keep the people who are good team players. - The people who are productive and supportive of colleagues."
Victoria Macpherson, a former fixed income saleswoman turned headhunter turned coach, said it's not always the case that obnoxious people are dumped. Sometimes the most obnoxious people stay, simply because they know when to stop being obnoxious and to start being charming instead.
"It's all about managing up," says Macpherson. "You need to keep the senior staff on your side - particularly if you're working for a team that's headquartered elsewhere. It can be very difficult for the remote senior management to work out who's dispensable and who's not; it becomes a question of perception."
It also helps to suggest that you might bring in a lot of business, soon. "The people who stay are often those who promise they've got a big deal coming in," says Macpherson. "There's always the hope that it will happen - management need to be kept on the hook. They'll figure they can't get rid of you because they'll lose the deal."
How safe are regulatory jobs? Credit Suisse suggests that banks are offshoring some of their regulatory jobs, but only at the junior end. "Banks still need compliance and control skills," says Roy Smith, a professor at NYU Stern and former partner at Goldman Sachs.
When costs are being cut, you want your clients to create the impression that they will not deal with anyone else but you. "You are safe if you own a customer relationship, or are in risk," says Chirantan Barua, banking analyst at Bernstein Research., "The rest is open."
If you don't have any clients, you need to find some. Or at least, you need to cultivate the impression that a stream of revenues (or 'efficiencies') are dependent upon your continued employment. It's the middle managers without portfolio who get dinged. Take HSBC, or Vikram Pandit's famous '6 steps to Vikram' program at Citi (in which he reduced management layers so that no one was ever more than six managers away from him).
In his new(ish) book, Average is Over, American economist Tyler Cowen argues that the workers of the future will be those who operate alongside technology to add value to the machines. Away from client-focused roles, this applies equally to banking. You don't want to be working in a trading role that can be easily automated and shipped out to, say, Birmingham. You do want to be tweaking and overriding electronic trading systems to make them even more effective.
European banks are doubling down at home and getting out of peripheral markets. Now is not the time to work for Deutsche Bank in Russia, or Italy, for example.
Ultimately, your survival might be as much down to luck as anything else. Wheeler relates the story of a talented former colleague who bounced from bank to bank and arrived just as each place was on the verge of announcing layoffs. His erratic career path had nothing to do with his talent (although might have been down to his due diligence) and was entirely the result of bad timing.