To say the job market for those looking to join the investment banking community is “tough” is an understatement.
While there is no denying the allure of an investment banking job, there is also no denying that these jobs are harder to come by. Broadly speaking, investment banks have not made it any harder to land these once-coveted positions. Unfortunately, the macroeconomic environment has made finding a top-flight investment banking job considerably harder than it was prior to the financial crisis.
Europe to Blame?
For example, Europe’s sovereign debt crisis has had a toxic impact on the investment banking job landscape. As global financial markets have grown skittish regarding the length and depth of the crisis, major investment banks operating in Europe have not been shy about taking the ax to their payrolls. In May, J.P. Morgan Chase cut more investment banking jobs in their London office. In June, Credit Suisse said it would pare its European investment banking staff by a jaw-dropping 30 percent.
Those are just two examples and they come on the heels of almost 134,000 job cuts by global investment banks in the second half of 2011. In fact, in 2011, it was easier to find a marquee bank that was slashed investment banking jobs than it was to find a firm that was not paring payrolls. Bank of America Merrill Lynch, Citigroup, Deutsche Bank, Goldman Sachs, Morgan Stanley, RBS, UBS and dozens of others dot the list of firms that eliminated investment banking positions last year.
All of the Big Banks
Unfortunately, the recent environment for investment banking jobs seekers has grown even more challenging. In a matter of less than two weeks in mid-July and early August, Societe Generale said it would eliminate 1,500 investment banking jobs while Deutsche Bank said it will pare its investment banking roster by 10 percent.
Through the first half of 2012, Bank of America, Citigroup, Goldman Sachs, Wells Fargo, Morgan Stanley and J.P. Morgan had cut 18,000 jobs, the Wall Street Journal reported. Barclays Capital may lower its investment banking staff by 20 percent, the Sunday Times of London reported in August.
Asia Also Feeling the Pain
Even in high-growth Asian markets, investment banks have scaled back on hiring and some have gone as far as to cut banking jobs. That is not surprising because deal activity in the Asia-Pacific region is slumping. Equity capital markets revenues in Asia ex-Japan are down 40 percent from a year ago, the Journal reported. What might sting a bit for prospective investment bankers looking to relocate to Asia is that the job market for bankers there is tepid despite a brisk IPO market.