More and more, Bay Street's financial services workers are waiting for the ax to fall.
Though job losses here aren't nearly as common as at U.S. banks, Canadian firms have been cutting jobs as they take huge write-offs in the wake of earnings declines. BMO Capital Markets, CIBC World Markets and the Ontario Teachers Pension Plan have each trimmed their workforces, according to media reports. Smaller firms such as Canaccord Capital, AIC Ltd. and CI Financial Income Fund have also reduced staff.
Given the current economic conditions, recruiters say it's imperative for job seekers to have realistic expectations in their search. Switching career paths now may be especially difficult, says Ken Stouffer, who recruits financial jobs for Fulcrum Search Science of Toronto.
"It is harder because there are not as many companies hiring and the competition is stronger," he points out. "We are not as far along the recessionary path as the States. Our rough ride is following a bit later."
Related industries are getting hit hard as well. Real estate investment trusts are getting rid of their controllers and replacing them with lower-priced executives, says Lisa Ludmer, director of permanent and professional placement at Adecco Employment Services in Toronto. She expects to see many companies restructure during the first quarter of 2009.
"Companies are still looking for talent, (but) they are really being picky," she says. "We need revenue-generating employees in every company."
Analysts and recruiters expect more job cuts as the weakening global economy continues to batter the Canadian economy and earnings of banks decline, particularly in their investment banking and brokerage businesses. In addition, more write-downs of bad loans are expected. Dundee Capital Markets Analyst John Aiken recently told the Financial Post he was surprised there had not already been announcements of "significant" job cuts, but pointed out banks try to avoid cutting heads around the holidays.
"The world has changed since September ...when Lehman was allowed to go down," observes Faye Thorek, a partner with Thorek/Scott & Partners, a Toronto-based firm specializing in financial services recruiting. "The market is changing and skills (employers need) are changing. Some people will never do the type of work they did before."
Job seekers who are contacting her firm are "cautious but worried," Thorek says. And no wonder: The once red-hot economy in Canada is slowing. Though the U.S. is in a recession, the Canadian economy is continuing to grow - albeit at a tepid 0.3 percent in the third quarter. However, pundits expect the U.S. recession will drag down Canada's economy as well. Banks are feeling the pressure.
After his firm's recent earnings report, BMO Chief Executive Bill Downe predicted tougher times ahead. Meanwhile, Scotiabank reported a double-digit decline in profits. "While Canadian banks have fared better than their counterparts in other parts of the world, none of us have been immune to the forces buffeting global markets," said Scotiabank CEO Rick Waugh.
In her 37 years in business, Thorek has seen nothing like the current job market. "I have been through recessions and mini recessions," she says. "This is very deep and very broad and this is global."