Is UBS about to quietly part company with some of its mid and senior-ranking M&A bankers? Recruiters in London say a series of layoffs are expected at the Swiss bank in the next few weeks, with the cuts falling at executive and managing director level.
Ostensibly, 2015 has been a great year to work in M&A. Earlier this month, information provider Dealogic said global investment banking revenues reached $19.8bn - their highest level since 2007. However, the global figures conceal serious regional variations. Dealogic says M&A revenues in Europe, the Middle East and Africa (EMEA) are down 4% year-to-date.
UBS didn't comment on the alleged redundancies. Despite being run by Andrea Orcel, a senior M&A banker and making various big name hires in recent years, its M&A business hasn't done too well this year. Advisory revenues at the Swiss bank rose only 3% in the first nine months of 2015 compared to the same period one year earlier. This compared to increases of 45% at Goldman Sachs and 27% at J.P. Morgan, which are stronger in the booming US market.
If UBS is making layoffs, where are the cuts likely to fall? The chart below shows the relative strength of UBS's M&A teams by sector in EMEA. Finance, telecoms and construction teams look safe. Oil and gas, technology, and utilities teams, don't.
If UBS does clear out some of its mid-ranking M&A types before Christmas, it won't be the only bank doing so. "It's that time of year," says another M&A headhunter, speaking on condition of anonymity. "Goldman Sachs and Credit Suisse have also been having a clear-out." Another headhunter said banks have begun letting go of under-performing M&A bankers "here and there," and that there's already a glut of director-level M&A staff: "When you're a director who's been let go, it's very difficult to find a new job. You don't have the rolodex of an MD [managing director] and you're not an execution person like a VP [vice president]. We're seeing some directors who've been on the market for six months or more and who can't find a new role."
It's not all doom and gloom though. Alongside its alleged redundancy plans, UBS is said to be planning a London salary hike to compensate for the reduction of fixed allowances, which were condemned by the European Banking Authority earlier this month.
Photo credit: Martin Abegglen