WARNING: If you personally do not earn substantial revenues this quarter, you may be discontinued

We are nearly at the end of Q1 and we have not mentioned redundancies for some time.

This does not mean, however, that the possibility has gone away.

This morning, for example, we spoke to a headhunter. That headhunter said he's given up headhunting (there are no jobs in his sector - fixed income) and has moved into 'benchmarking.'

Sounds inconsequential, except the benchmarking he's doing is the precursor to a round of redundancies.

"It's all about benchmarking revenues and compensation per head," he says. "Banks are trying to identify where the revenues are and where the revenues aren't on a person by person basis so they know who to eliminate. A lot of these businesses are just totally bloated right now."

Reviewing the first quarter

Has the first quarter really been that bad?

Banking analysts seem to think it's not totally desperate. Earlier this week, Huw Van Steenis at Morgan Stanley issued a note suggesting that the first quarter's been quite reasonable and that rates and commodities businesses have actually done well.

Similarly, Guy Moszkowski at Bank of America Merrill Lynch, predicted last week that first quarter revenues, "are unlikely to be dismal."

Unfortunately, however, IBD revenues have yet to come through: Van Steenis notes they're down 21% quarter on quarter due to increased (geopolitical) risk.

Not dismal is not enough

The bad news, however, is that vaguely acceptable isn't what's required. After all the hiring last year, banks need revenues to increase substantially.

Last year, revenues per head fell 21% at Goldman, 26% at Credit Suisse, 12% at JPMorgan and 1% at Deutsche.

"The driving factor for redundancies isn't going to be revenues in the first quarter," says Simon Maughan, European banking analyst at MF Global. "It's going to be whether banks can develop the kinds of revenues they were confident of delivering a year ago [when they decided to increase headcount].

"The answer is, they probably can't," he adds. "We therefore expect trimming and cost reduction to be an industry-wide feature this year. Under the old compensation model, banks could have simply reduced bonus expectations. Under the new model of higher salaries, they need to get rid of underperformers."

You have been warned. You need revenues against your name. And you need them soon.