Nomura traders: "Make cuts once and for all. Get them done with"

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Nomura is making more redundancies. Bloomberg reported this morning that the bank is likely to shed "more than 100 bankers and traders at its overseas unit, with cuts likely to be announced at an investor forum in Tokyo next Thursday. Europe is likely to bear the brunt of the pain.

The chart below explains why. In every year since 2013, Nomura International PLC - the Nomura business based out of London, has made a loss. Things improved slightly in 2017 after Nomura closed its equities business and cut 400 jobs, but in 2018 the losses rose again. With JPMorgan saying this year has begun badly and UBS saying the first quarter was one of the worst in recent history, it's easy to see why Nomura's executives might not be confident that losses will shrink back in 2019.

For Nomura's London markets professionals, the ongoing threat of redundancy is an exercise in powerlessness.

Traders we spoke to this morning hadn't been told about the latest cuts, which seemed to originate in Tokyo. "Bloomberg knew before we did," complained one. One managing director said the latest redundancies are simply the bank's standard pre-bonus cost cutting, plus the cuts that were flagged in January but didn't actually happen.  "Everyone said there were going to be a big round of cuts in Jan, but that round was actually very small," he said. "The firm decided to put the layoffs on hold and they've now become part of the exercise we'll see in the next few weeks."

Nomura declined to comment for this article, but headhunters said the Japanese bank can be a good place to work. - It rewards well for performance and is quite entrepreneurial. It's just that the uncertainty is a killer. The London trading MD agreed: "These rolling three month reviews make our lives very difficult. If they need to cut costs massively and to fire a lot of people, then so be it. Make the cuts, get the done with, and let's stick with a strategy for a year or two to see how it works out."

When the cuts come, insiders say one particular group is likely to be immune. - Jez Mohideen's digital group, which is focused on developing a data strategy, on pioneering the use of artificial intelligence and machine learning in electronic trading, and on setting up data labs. Mohideen has already focused on rates and credit and he plans to expand to cover currencies, commodities and equities between now and 2021. His group is expected to grow in the process - Nomura traders may want to align themselves here.

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