Investment banks are cutting once again.
Fixed income traders, on the back of both reduced revenues and strategic decisions to exit business areas, are at the sharp end. Morgan Stanley is cutting 25% of fixed income staff and job prospects are shaky elsewhere.
London bankers, particularly employees at Credit Suisse and Deutsche Bank, are most at risk and – in theory – global investment banks have lost their appetite for expansion in Asia.
Meanwhile, record revenues in the advisory functions at US investment banks should mean that bankers state-side are sitting relatively pretty. But what’s the reality?
Admittedly, we’re looking back rather than forward, but figures provided to us by research firm Coalition suggest that the worst place to have worked over the past two years is in fixed income in London. Headcount has shrunk by 15% here since the third quarter of 2013, they suggest, compared to 11.9% in the U.S. and 8.9% in Asia.
The fact that fixed income traders are being laid off is the only consistent stat in investment bank job numbers globally. Strangely, despite 100 job cuts at Standard Chartered this year and trimming at banks like CLSA, equities in Asia is the safest place to work in the front office in investment banking.
Headcount increased by 6.4%, or around 300 people, according Coalition figures. Whether this lasts is a different matter – Barclays is one bank set to cut headcount in Asia, with a focus on scaling back its cash equities business.
This is one of only two areas not to experience any shrinkage – M&A and advisory headcount in the UK has been largely flat.
Generally, despite the cooling of sentiment towards Asia from global banks, the region is still the overall safest place to work. Just 166 jobs have been lost over the last three years – or a 1.3% decline. The U.S, despite being the biggest market and overall growth in Wall Street jobs, has lost the biggest number of banking jobs – 1,738 since Q3 in 2013, or a 7.3% decline. Meanwhile around 1,200 front office jobs have gone from London.
All of this is a moot point, of course. Over the next few months fixed income headcount will inevitably deteriorate further and, as European investment banks restructure, the chances are that London will be the shakiest market.