Is UBS quietly letting go of people in M&A?
In theory, UBS has finished making redundancies. In reality, recruiters in London say UBS is quietly letting people go from its M&A business.
Three senior recruiters at separate firms say UBS cut people from its London M&A team last week. The cuts are said to have affected particular industry teams, including industrials, real estate and telecoms, media and technology. While senior staff at director level and above are understood to have borne the brunt of redundancies in some teams, juniors at analyst level are said to have gone from others.
UBS declined to comment on the cuts. One insider said she was unaware of the alleged layoffs and that UBS is not making cuts, however.
Last week, UBS investment bank CEO Andrea Orcel intimated that layoffs at UBS were over when he told Bloomberg that UBS is, "exactly where it should be" given the current environment. The investment bank, which has made thousands of redundancies over the past few years, cut just 25 staff in the first quarter.
Orcel is an M&A banker by trade. When he arrived at UBS in 2012, he set about building up the bank's M&A business with various senior hires. In March this year, Orcel said recruitment was continuing and that he was interested in hiring senior investment bankers in Europe who fit “the role” and “the business”. Earlier this month, UBS hired Chris Gibson Smith from the London Stock Exchange as a vice chairman for its investment bank.
Despite Orcel's investment in M&A, UBS ranks outside the top 10 for EMEA M&A fees so far this year according to Dealogic. Swiss rival Credit Suisse comes in 10th. However, fees can be a lagging indicator of performance and UBS ranks sixth in terms of volumes this year.
The alleged layoffs might have something to do with declining revenues in M&A this year: Goldman Sachs and Citi both reported single figure year-on-year declines in the first quarter, although Bank of America and Morgan Stanley reported improvements. In the UK alone, some sectors have fared far worse than others: deals are down by 90% year-on-year in oil and gas, but up by 167% in utility and energy.
Departures may also be related to upgrading. In his interview with Bloomberg, Orcel said net hiring is off the table: if UBS wants to hire anyone, it needs to let people go first.
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