The good news about this year
Citigroup may be planning to axe more people than Goldman Sachs employs globally, but there are still reasons to be cheerful.
The latest survey from PricewaterhouseCoopers and the CBI confirms that general sentiment across the financial services industry is now as low as it was in 1998 and 2003, neither of which were good years for banks.
On the other hand, hiring plans appear to be going ahead regardless. Securities traders remain bullish about employment, with a balance of 55% saying they plan to hire in the first quarter.
Fund managers are even more perky, with a balance of 95% saying they plan to add staff in the next three months.
Headhunters confirm things are more favourable than they seem. "There's a lot happening in wealth management commodities, equity derivatives, and FX right now across all regions," says Shaun Springer, CEO of Napier Scott. "If the CBI says people are more confident about hiring than they were in Q4, perhaps it's because they're becoming accustomed to sailing in leaky boats."
"There's some selective hiring for businesses that were unable to recruit at the end of the last quarter," says Jason Kennedy of recruiter Kennedy Associates. "It's mostly in equity derivatives, commodities, interest rates, hedge fund coverage and Asian coverage."
Kennedy says Goldman is already putting out hiring mandates for 2008.
However, the likes of Citigroup, Merrill Lynch, Bank of America, Morgan Stanley, Bear Stearns (and UBS) are more likely to spend the first quarter putting their houses in order than adding new staff. Citigroup is reportedly poised to reveal plans to axe 32,000 people next week and Merrill Lynch is expected to clear the decks in preparation for an influx of new staff under Thain.
"Citi, Merrill and Bank of America are still calibrating bonuses and reorganizing their businesses to ensure profitability," says the head of HR at one big US bank. "The US banks that hire in the first quarter are going to be Credit Suisse, Goldman, Lehman and JPMorgan."
