Banks Slash Chicago Jobs

Investment banks' Chicago offices are reducing headcounts by up to 40 percent, potentially closing an avenue for leadership development.

The Financial Times reports:

"Goldman Sachs, Citigroup, Bank of America Merrill Lynch, Morgan Stanley and Credit Suisse have all culled from their Chicago rosters, some by 40 per cent or more, according to sources in the community."

Publicly, Chicago investment banking recruiters doubt the cuts have gone that far. "Forty percent sounds very high to me," says Nathan Stange, a partner at Brokerage Consultants Inc. "Three, four, five years ago you were already seeing some of that trimming going on. I would be surprised to hear it was 40 percent of late."

Julie Kanak, Chicago-based executive vice president with the search firm DHR International, agrees there were layoffs, but thinks the worst is over.

"We saw the bulk of it toward the end of last year and it very much carried over into the first quarter," she says. "In general, the bulk of layoffs have been completed in investment banking circles in Chicago."

Impact on Career Paths and Leadership

Do those the layoffs mean the Windy City talent pipeline will shut down going forward? "It hasn't been cut off," Kanak says. "Groups are always looking for talent and it makes sense that Chicago would be a center they pull from because you have two great business schools here."

However, as the FT points out, bulge bracket firms are run from New York. That's nothing new. But while rank-and-file positions are being paired, many top institutions' Midwest regional leaders are exiting too.

"A majority of the banks' Chicago/Midwest heads or heirs apparent have publicly or privately announced plans this year to depart," the FT says. "They include Goldman Sachs's Byron Trott, Merrill Lynch's Todd Kaplan, Citigroup's Michael Canmann, Deutsche Bank's Charles Denison, and Morgan Stanley's Sandy Thompson."

Still, Stange and Kanak can point to a few remaining employment sweet spots in the local market. "Compliance is still very hot," Stange says. "You're going to see huge growth in compliance and regulatory functions over the next two to four years."

Kanak cites activity in private wealth management and on the retail side where everyone is competing for deposits.