How it comes to be that M&A bankers must never be laid off

M&A bankers aren't always immune to redundancy. In recent times there have been M&A massacres at Nomura, RBS and Credit Suisse. In the more distant past, banks wantonly jettisoned junior M&A people when times got tough. But on the whole, it seems that the M&A population is less volatile and more secure than that of other banking subgroups. There's a good reason for this: the M&A pipeline.

The 'pipeline' is an opaque and nebulous thing full of hidden promise which M&A bankers can point to at the slightest intimation of job cuts. M&A revenues aren't high enough? - They're in the pipeline. Thinking of cutting some M&A bankers? - Bad idea when that pipeline might suddenly phut out some big deals requiring heavy manpower.

As the charts below (taken from a report by Bernstein Research) show, the M&A pipeline right now is big and has become bigger in value terms since the third quarter of 2012. Goldman's M&A bankers look especially secure. By the same rationale, so do its ECM bankers. Who cares that these deals aren't entirely certain and have yet to generate fees? If costs need to be cut, they will have to be cut elsewhere, like maybe fixed income trading - again.