There's still hiring in London. Brexit cuts slated for September

It may seem like the world fell of a cliff last Friday, but finance recruiters in London say life goes on. Job vacancies haven't been cancelled; roles are still being filled - albeit more slowly than before. However, there's a cloud on the horizon.

"We're seeing hiring continuing," says Andy Pringle at London recruitment firm Circle Square. "We had a couple of offers that we thought might be withdrawn but they haven't been."

"No one has said anything about current vacancies being pulled," says a partner at one markets-focused search firm in London, speaking off the record. "The message we're getting from banks is that it's business as usual." A partner at an M&A search echoes this: "Nothing's been put on hold yet."

The question all recruiters are asking, though, is what happens after the summer. Following last week's dire predictions of instant layoffs, the mood in London has become more pensive. "Summer is always quiet," says Pringle. "Cuts are coming, but no one will want to be the first to make them - to be the one who's cutting because of Brexit. It wouldn't surprise me if they're pushed back to September time."

"It will be a summer of reflection, of meetings, of consultation with management consultants," says a consultant working with one of London's top finance strategy firms. "And then there will be cost cutting. Restructuring plans are being accelerated. Cuts that were already being planned for January 2017 are being brought forward to September and October. Teams are being asked for names sooner rather than later, and you'll see some accelerated retirements - although they take time and won't be hitting the headlines. Things are only really going to kick-off in the autumn."

Instead of big banks, most recruiters say hiring is being sustained by smaller firms and boutiques. This applies as much in London as on Wall Street. "It's very tough on the sell-side right now," says the head of one international search firm, based in New York City."There are no jobs, no one is hiring. A lot of banks are waiting until this quarter ends to see how things turn out. We're hearing that cuts will come in September."

US banks are due to announce their results for the first half in the middle of next month, with European banks due to follow a few weeks later. In a note out yesterday, analysts at J.P. Morgan forecast that investment banking revenues will now fall by 24% this year, with revenues in investment banking divisions (IBD) falling the most, as per the chart below. "Underwriting and advisory areas...could see material slowdown in H2 16E given reduced CEO and board confidence in doing M&A transactions or raising fresh capital," say the analysts.

At one point, it looked like seasoned bankers with the wisdom of several cycles behind them would be at a premium after Brexit. With revenues in IBD expected to fall, that's not necessarily the case. "It's going to be all about cutting costs," says the consultant.

One group's pain will be another group's gain though. Even as M&A and capital markets bankers fall out of favour, Pringle predicts a huge upsurge in demand for restructuring professionals. "This year is going to be absolutely massive in restructuring," he says. "If you've had anything to do with debt advisory or debt restructuring, this is the area to be moving into."