Who will be most re-employable - people from MF Global, Credit Suisse, or Nomura?
It's a bad day for redundancies. As of today, thousands of jobs are set to go at Nomura (mostly in EMEA), 3,500 jobs are going at Credit Suisse (mostly in Europe, fixed income and investment banking coverage), and 725 people are being made redundant at MF Global.
Credit Suisse's $2.3bn of cost savings aren't expected to take full effect until 2014, although headhunters say several senior CS FICC professionals were made redundant yesterday. Nomura doesn't give a date for taking out $1.2bn of costs, but a review of the European business is said to be happening next week. MF Global's people are on the streets as of yesterday.
Credit Suisse bankers are going to get re-employed first
Even though Credit Suisse is pulling back from areas other banks are cutting in (structured credit, securitization, EMEA client coverage in smaller markets), its rejected employees are most likely to be re-employable.
Credit Suisse's fixed income currencies and commodities (FICC) business has performed badly but it has not been the worst. Top line revenues are down 31% year on year, versus a decline of 37% at Goldman Sachs.
Nevertheless, headhunters say CS bankers will generally be sought after in 2012. "They're letting people go in credit and rates sales and trading," says the head of one fixed income boutique. "There are no hiring bids for people this year - not even on base salary alone, but if CS people wait until 2012 they may be picked up in upgrading."
Jefferies is still in the market for fixed income professionals: today it announced the arrival of Guy Cornelius from Nomura as head of sterling fixed income sales and Christian Janssen from BarCap as head of real estate DCM.
Nomura - clearing out the ex-Lehman excess
People let go from Nomura will find life harder going.
"They just don't have the brand," says the head of one fixed income boutique.
"Nomura kept too many people from Lehman," alleges another headhunter who's worked with them. "They wanted to keep the Lehman team together so they hired almost everyone and the revenues haven't come through. In the US, it's a completely different ball game - Nomura's still hiring there and it's a lean, mean operation."
Figures for the performance of Nomura's European operation point to some serious problems. Between the first and second quarter of this year, its EMEA revenues fell 70%, to 11bn Yen, just $147m US dollars. Year-on-year, the Q2 decline was nearly 80%.
Unless things pick up Nomura will need to make massive redundancies. Annualized EMEA revenues of just $560m and a compensation ratio of 50% imply headcount of just 1,400 - even if aveage compensation per head is trimmed to $200k. Right now, Nomura employs 4,436 people in Europe.
Cornelius has clearly chosen to make a pre-emptive move. Headhunters say other ex-Nomura bankers who are ejected involuntarily are going to struggle, especially those from the fixed income business. "People are going to have to leave the industry," argues one.
MF Global has a core of top performers and they are already taking calls
The sad thing about MF Global is that it seems to have kept hiring until the bitter end, and that many of those hired recently - on guarantees - are now minus a job and their guarantee.
Recent recruits in London include Nadia Elhosh from Mitsubishi UFJ for European high yield distressed sales, Edward Boxshall from Black Gold Energy for energy futures, Gareth Clark from Newedge as a metals broker, James Chappell of Olivetree Securities as an equity researcher covering financial stocks and Graham Wayne from HSBC as global head of programme trading. Chappell only joined in September; so did Wayne.
Headhunters say MF Global has some highly desirable staff, particularly in its equity futures and commodities teams. People like Andy Smith, its former head of research and a former research head at ICAP, are also well networked and expected to get re-housed.
"10-15% of people at MF Global are going to get picked off by competitors," says one equities headhunter who's worked with the firm. "They had a very strong futures and derivatives business. I've spoken to people who are already in conversations with banks like Citigroup, Goldman, Morgan Stanley and Deutsche. Banks are going to be interested in hiring people with good relationships."
MF Global's commodities professionals may also be selectively lucky. Banks have pulled back from commodities hiring this year, but commodities brokerages Intl FC Stone and Louis Capital markets are apparently hiring in London. "There are definitely opportunities in some brokerages," says Colleen Quilty at commodities search firm the Quilty Group. "Exchanges are also building up their product offerings and there may be openings there too," she adds.
