Bankers in Asia are bracing themselves for another round of jobs cuts after disappointing levels of trading and issuance activity especially in equity markets this year as markets continue to suffer from the global economic slowdown.
Most banks made cuts of up to a few tens of people each in the final quarter of last year or the first quarter of this year, but some have let a further handful of people go in recent weeks, including Credit Suisse, Morgan Stanley, Deutsche Bank and Goldman Sachs, according to headhunters and senior bankers.
Renaissance Capital, the Russian-backed emerging markets bank, has closed its Hong Kong and Beijing offices with many of its staff there facing redundancy as it refocuses on Russia and Africa. CLSA, the equities-focused house, made more than 20 people redundant last month.
RenCap and CLSA have not confirmed the number of redundancies made, while the other banks all declined to comment officially, but some said that departures have included resignations of people who are not being replaced as well as redundancies. A person familiar with Credit Suisse said any recent cuts were part of its ongoing 7 per cent headcount reduction announced last year.
Cuts so far have been mainly in Hong Kong, Tokyo and Australia and across businesses, but equity capital markets and equity trading are seen as most under pressure for the rest of the year at all banks unless there is a big rebound in markets.
“Given our ongoing dialogue with senior managers – and lacklustre markets, volumes, margin pressure and a dearth of successful IPOs – it’s pretty clear that the bloodletting is imminent,” said Russell Kopp at Correlate Search Asia, a Hong Kong-based recruiter. He added that most companies have done everything possible to avoid aggressive cuts because each time banks have done this in the past 15 years they have often looked foolish six months later. But this time may be different. “The key is that it has to be done – and is probably long overdue,” he said.
John Wright, founder of Global Sage in Hong Kong, said it was the worst hiring environment he had seen. “Asia isn’t being spared just because it is considered a growth area,” he said. “In fact, the margins for banks are under tremendous pressure and profitability remains a huge issue.”
The bright spots, he added, were wealth management and outside the traditional hubs as banks boost their presence in places such as Kuala Lumpur, which has seen some of the biggest equity offerings this year, and Jakarta.
Adam Jeffes at Morgan McKinley in Hong Kong, another recruitment company, said most banks had tried to remain in a holding pattern since the first quarter. “The back end of last year and the first quarter of this year is when we saw the most cuts, but most banks have been in a bit of a holding pattern since then,” he said.