More job losses pending in equities and corporate finance
The survey of recruitment plans in London, drawn from 109 responses from banks in seven sectors, paints a gloomy picture of two core investment banking sectors. No firm plans to raise corporate finance headcount and nearly 30% plan to cut jobs.
Weighted for the size of department the results are even gloomier, as the large firms are more likely to downsize.
A similar picture emerged in equities, where weighted figures show that nearly half of banks intend to cut staff, far higher than in the last survey of second-quarter hiring.
Banks are also cutting back on graduate trainees. Morgan Stanley is hiring 130 in Europe this year, down from 210 in 2001, while JP Morgan is taking 190 versus 400.
Merrill Lynch began a new round of lay-offs last week, according to sources close to the firm. Spokespeople declined to comment on reports that dozens of investment bankers and equities staff will go.
WestLB, the German bank, is expected to lay off more than 100 professionals in the UK and Germany and Deutsche Bank set out plans for several hundred job losses.
It is not all bad news. Banks want to increase headcount slightly in private banking, private equity and fund management and in fixed income, the most profitable area this year; 50% of respondents expect to take on staff. That is lower than the 63% in the last survey but is clear evidence of a widespread trend to capitalise on the best sector, which has seen firms such as Banc of America, Bear Stearns and BNP Paribas hire in numbers this year.
Credit derivatives is a particularly healthy sector, driven by the popularity of risk transfer products and high yields. Headhunters report strong demand for structured credit sales and credit structuring specialists.
Most big firms are focusing on distribution, particularly US investment banks that lack established relationships in Europe, so plain fixed-income sales to corporates is also a hot spot.
Costs are still an issue. Some banks are holding fixed income staff costs steady by firing a senior person when they take on a few junior ones, while others offset expensive hires by laying off more junior staff.
See eFinancialCareers.com for more details of the hiring survey.
