Employees in the investment banking industry are reeling after a number of serious cuts announced by several key firms worldwide. Starting with some major reductions by Deutsche Bank which were announced in July of this year, several other banks have scaled back and restructured their operations from markets as geographically and economically diverse as Qatar to Singapore.
Credit Suisse Shuffles Persian Gulf Presence
According to a Reuters report Credit Suisse is scaling back its investment banking team in Dubai, and moving its back office functions from the Gulf state to neighboring Qatar in a move to cut costs. The bank told Reuters that the move, “involves realigning resources to growth areas and adjusting capacity to meet client needs.”
The move to Qatar may be motivated by political realities as well. A Qatar based sovereign wealth fund owns a 6.2 percent stake in the Swiss financial firm.
UBS Cuts Closer to Home
Investment banking jobs in Europe are also on shaky ground, with the other Swiss banking giant UBS announcing that it plans to cut 80 to 90 jobs at home. This would represent approximately 17 percent of UBS’s investment banking staff, and the cut would impact both senior and junior bankers.
Nomura Holdings Joins in on European Cuts
Business Week is reporting that Nomura Holdings will also be joining in on European investment banking cuts, with an announced 100 investment banking jobs being slashed as it rolls back a four year old expansion plan. While bank has struggled to swallow the acquisition of Lehman Brothers’ European and Asian business lines in 2008, the lack of growth in investment banking activities has forced the firm to dramatically reduce costs in the short and long-term.
Cuts Build on Deutsche Bank Announcement
These recent announcements are really a continuation of a trend that has been ongoing through much of the third quarter of 2012. Back in July, Deutsche Bank announced that it would launch a major restructuring, including cutting 1,500 jobs in its global investment bank, in order to reduce costs by approximately 3 billion euros. This would represent approximately 15 percent of Deutsche Bank’s investment banking staff.
Job Cuts hit Asia as well as Several Banks Reduce Numbers
The pain felt in amongst investment bankers has not been limited to just Europe and the Middle East. Several leading banks reduced staff in the Far East, including Credit Suisse, Citigroup, Goldman Sachs and Morgan Stanley. While the region was viewed as a potential source of strong growth for investment banking activities coming out of the 2008 crisis, the results have not panned out as expected and costs need to be cut. While currently the reductions are just job cuts, there have been some hints that banks could leave the area entirely, with Morgan Stanley co-chief executive Bill Strong indicating that “the weight of additional regulation and market uncertainty may force subscale players out of certain businesses in Asia.”
What this Means for Job Seekers?
The outlook continues to be bleak for job hunters in the investment banking industry. Economic growth has collapsed in Europe, and continues to be rather lacklustre in a number of Asian economies. While occasional stories of hiring and growth in select segments may be grounds for some optimism, the number of unemployed investment bankers worldwide is certainly putting pressure on those competing for limited opportunities.