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Investment Bankers Out, Technologists In

While most investment banks are cutting costs, technology budgets for the major Wall Street banks are still growing. Does this really mean more recruitment though?

Not necessarily; while budgets are being forced up, an increasing proportion is being eaten up by regulatory IT spend. Since they've broken out budgets on IT infrastructure and hardware, unlike their European counterparts, it appears that the majority are increasing their tech spending. We decided to take a look at each company's website to see where they’re hiring currently, and whether more recruitment is on the cards.

Bank of America:

Tech budgets year-on-year to September: +8%

Current recruitment:There are currently 3,176 IT positions worldwide, but only 12 tech positions focused on its U.S. investment bank, enterprise specialists, java developers and technology managers. There are also roles within its corporate headquarters in Charlotte and wealth management divisions.

Prospects: Still not great. Bank of America is, of course, in the midst of a cost-cutting program aimed to strip out $5 billion by 2014. 30,000 jobs will go, but the bank is also expected to cut back from information technology as it consolidates IT and support offices. For front office-focused technologists, this doesn’t automatically mean shakier job prospects, but its Project Bac cost-cutting initiative has seen the simplification of its trading platforms – from 50 down to just one.


Tech budget year-on-year to September: +14%

Current recruitment: There are currently 654 tech jobs cross North America, including 113 in its investment banking unit. There are 92 positions open for Java developers, which is yet more evidence that it’s one of the hottest skill-sets currently.

Prospects: Middling. The tech functions of Citi have arguably already felt their fair share of pain after the bank concluded a program designed to strip out $3 billion in IT and operations costs last year. However, the shake-up at the top – which last week saw Vikram Pandit depart and Michael Corbat take over as CEO – has prompted many to predict further downsizing and tech budgets could suffer. Having said this, Citigroup has remained among the more active technology recruiters throughout 2012.

Goldman Sachs:

Tech budget year-on-year to September: -9%

Current recruitment: Goldman has 130 IT roles compared to just eight for investment bankers. Its recruitment efforts are still focused on FICC (particularly commodities) as well as clearing and regulatory projects and asset management roles. Most of these roles are in development, but there are also some more senior jobs on offer.

Prospects: Middling. You probably shouldn’t read too much into Goldman’s slight decline in tech budgets; it’s still a big employer of technologists, with around 25% of its total headcount in IT. What’s more, while other banks have spoken of further cuts, Goldman appears content with its previous target of $1.9 billion in cost-savings. However, not all of this is coming from redundancies and compensation reductions, so technology budgets could be impacted further. This could dent appetite to hire technologists, or result in some cuts in these divisions down the line.

J.P. Morgan:

Tech budget year-on-year to September: +5%

Current recruitment:  There are currently a healthy 1,199 tech job opportunities at J.P. Morgan across its offices in the U.S. There’s no clear pattern to the roles, with everything from commodities to wealth management and corporate infrastructure.

Prospects: Decent.The healthy number of jobs shouldn’t necessarily be interpreted as a continued push in technology. J.P. Morgan employs around 30,000 technologists globally, so current hiring is small beer. Plus, it’s ‘Value for Scale’ initiative, designed to strip out costs from technology and operations, means redundancies could be on the cards. Nonetheless, recruiters tell us that the bank is still recruiting integration specialists, app developers and specialist cloud computing architects. What’s more, its technology graduate intake has increased again this year.

Morgan Stanley:

Tech budgets year-on-year to September: +7%

Current recruitment: Morgan Stanley may have the best IT team, but it’s not expanding rapidly. There are just 109 roles currently across the nation, with the largest number, 24, at its Purchase, New York facility, headquarters of Morgan Stanley Wealth Management.

Prospects: Middling. On the one hand, Morgan Stanley’s reputation for innovation in technology should put its IT team in good stead going forward – it was an early adopter of cloud computing and virtualization as well as developing the first Android app on Wall Street, for example. On the other, it is cutting costs; CEO James Gorman was talking of how the bank had “integrated substantially all our technology systems” earlier this year. While some layoffs could occur, it seems unlikely that it would want to cut its highly-regarded tech team too deeply and may instead just curtail recruitment.

AUTHORPaul Clarke and Fred Yager Insider Comment

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