Morning Coffee: Banks are intentionally freaking out their employees. Deutsche Bankers are getting rehired

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Like some clichéd science fiction movie from the 80s, many people who work in banking are looking over their shoulder, worried that the machines are coming for them – or at least coming for their jobs. Indeed, the fear of automation has become one of the biggest narratives in the industry. But that general angst isn’t based on reality, says one top banking executive, who pointed the blame over stoking the fear of automation directly at the feet of those in the C-suite.

“A lot of the fear that we’ve created in our workforce has been exactly that: fear we’ve created,” Cathy Bessant, Bank of America’s chief operations and technology officer, told Bloomberg. Instilling worry in staffers over automation isn’t some kind of twisted motivational tactic, but rather the byproduct of executives touting their technology innovations, Bessant said.

Bessant reiterated the alternative narrative: that the general concept behind automation is to free up human capacity to tackle other, more important challenges, not to replace people. “It’s our belief that there’s not some concept of job decimation that has to happen as a result of robotics,” she said.

Recent headlines provide somewhat mixed evidence for her claims. Morgan Stanley, for example, is using predictive analytics and machine learning to scour research reports and market data to provide additional investment insights for advisors. It’s even using artificial intelligence to comb through social media profiles and other online mediums to send automated yet personalized emails to clients so advisors don’t have to. But the bank has no plans to cut headcount within its wealth management division. Various banks are also automating some of their underwriting processes to take pressure off junior bankers, yet analyst classes aren’t getting any smaller.

That said, it’s impossible to ignore how automation and AI have cut into the number of securities roles available today. Bank of America itself cut headcount by 1,400 in the first quarter, despite adding more engineering talent, like every other firm. Even so, there are certain advantages to talking up the threat from artificial intelligence - liking making expensive bankers thankful they simply have a job when their bonuses are smaller than they anticipated.

Elsewhere, senior Deutsche bankers in the U.S. are beginning to follow in the footsteps of their European colleagues by jumping ship before they can personally be affected by ensuing job cuts. Chris Blum and Scott Sartorius, co-heads of the bank’s U.S. leveraged finance group, have reportedly vacated their roles for new jobs. Sartorius is joining Citigroup while Blum has taken a position with an unknown rival bank, according to Business Insider. Several high-ranking European staffers at Deutsche Bank have left voluntarily to join competing firms over the last month despite not personally facing redundancies.

Meanwhile:

PwC has banned all-male short lists for jobs in the U.K. as it looks to amend the gender imbalance at the top of the company. (BBC)

Google employees and investors are pushing the search giant’s parent company to address workplace diversity concerns, including proposing linking bonuses for leaders to culture and inclusion goals. (Bloomberg)

For the first time since 2000, job vacancies exceed the number of unemployed Americans. (WSJ)

Canadian hedge fund Castle Ridge Asset Management has hired former J.P. Morgan managing director Edwin Li to help the AI-focused firm expand into the U.S. (Institutional Investor)

HSBC has made a number of major organizational changes within its investment bank, including naming Morgan Stanley veteran Kamal Jabre as its new global head of advisory. The UK bank also promoted several current staffers to more critical roles following a series of recent defections. (Financial News)

John Clements, the former head of Citi’s CLO business, is joining Barclays to run its CLO origination and syndication team in the U.S. Barclays also poached two bankers from Natixis to set up a new middle market CLO platform. (Global Capital)

Hedge fund giant Bridgewater Associates has turned massively bearish on the market. Meanwhile, asset manager Algebris Investments has set up an “end of the world fund” over fears of another economic collapse. (FT)

Men of color are 25% more likely to be turned down for a raise than white workers. Women of color are 19% less likely to get a raise. (Bloomberg)

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