Happy Thanksgiving! Sorry, you're fired

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As bankers spend today feeling good about all that they have to thankful for (which is admittedly quite a lot), they might also permit an ever-so-slight feeling of trepidation. Falling as it does in late November, Thanksgiving also comes just before investment banking layoff season. When the turkey's been digested, the cost cutting will begin.

Using previous years as a guide, the next few weeks could be harsh. In the fourth quarter of 2016 Goldman Sachs cut 500 people (net) from the whole firm. UBS cut 183 people net from its investment bank. Credit Suisse cut 150 from global markets, and J.P. Morgan cut 428 from its corporate and investment bank.

This year is unlikely to be much different: J.P. Morgan's banking analysts are predicting double-digit percentage drops in sales and trading revenues in the fourth quarter versus the previous year, and various banks have offered gloomy prognostications for fourth quarter revenues. Although markets revenues are expected to pick up in 2018, the weeks between Thanksgiving and Christmas are the perfect time for clearing the decks in preparation of "upgrading" staff in the New Year.

Wall Street headhunters say stealthy cuts have already begun. "There were cuts last week and there will be further cuts," said one, declining to elaborate further. Bank of America is known to have made a handful of layoffs in September. Deutsche Bank, BNP Paribas and Credit Suisse are all expected to take out costs before the year end. Some degree of pain is almost certainly coming.

For the moment though, layoffs are not front of mind. "Thanksgiving day is sacrosanct," says one senior salesperson. "People rarely work on Thanksgiving day and most people don't work the half day that markets are open on the Friday."

The exception to the Thanksgiving holiday rule is the research department. Strategists and equity researchers often release outlook pieces on the Monday following Thanksgiving, meaning Friday's a busy day. M&A bankers also work the weekend after Thanksgiving in the rush to launch and close deals before Christmas.

It's not all bad though. One banker says any work that's done in the Thanksgiving period is just, "going through the motions." And another headhunter, says even post-Thanksgiving layoffs are something to be thankful for: "I just see them as a clearing out before the next hiring season."

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Photo credit: Thanksgiving Turkey by Ruocaled is licensed under CC BY 2.0.

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