Even when putting aside the constant fear of automation, it’s been a rather gloomy start to the year for most sell-side traders. Some firms have completely retrenched from equities while others have made major cuts to both their stock and bond trading teams. New York, along with London, have been the biggest targets for layoffs.
For the chart below, we looked at the total number of Finra-registered staff in New York, excluding financial advisors, and compared them to the figures we compiled at the beginning of the year. As you’ll see, every major investment bank has already made significant cuts to their registered securities staff in New York – and many more redundancies are planned for the second half of the year. (It’s important to note the numbers represent net losses, meaning they take into account any new hires that have been made in 2019).
While Citi reportedly plans to cut hundreds of trading jobs by the end of 2019, the numbers from Finra suggest that they have been targeting fixed income and equities sales and trading staff from the start. Morgan Stanley and Goldman Sachs both did significant pruning earlier in the year, while Barclays just acknowledged last week that it eliminated thousands of jobs across the bank during the second quarter.
Of course, Deutsche Bank is no surprise. In fact, it’s a little shocking that it's only eliminated a net 85 securities positions in New York. DB had plans to “juniorize” some roles in New York to save money, so those additions likely offset many of the more senior cuts. There’s also the fact that European banks have a smaller footprint in New York than U.S. banks. Goldman’s numbers are particularly eye-opening considering its diminutive size compared to Citi and Morgan Stanley.
Unfortunately, the search criteria involving J.P. Morgan and Bank of America Merrill Lynch has changed since we last checked the numbers in April, so we were unable to make an apples-to-apples comparison over the course of the entire seven months for those two firms. However, we can say that JPM and BAML eliminated a net 29 and 25 securities positions in New York, respectively, during the first four months of the year. Judging by the other banks, the trend at J.P. Morgan and Bank of America Merrill Lynch has likely only increased.
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