Investment Banks Continue Consolidations and Cuts

Investment banking job cuts are continuing worldwide, with the latest unconfirmed reporting circling around Credit Suisse’s Dubai operation. The Swiss bank is said to want to consolidate its regional investment banking business to Qatar while locating its equities business in Riyadh, Saudi Arabia. According to Bloomberg, some staff will relocate to Doha from the existing office, while other positions will be cut entirely.

The decision to locate its Middle Eastern and North African operations in Qatar may be linked to investment ties between the country and company. The nation has a six percent stake in the firm, while also owning its London head office real-estate. Qatar is working diligently to establish economic activity in the financial sector in order to diversify its economy away from its traditional reliance on oil and natural gas revenues.

Credit Suisse responded to the report of the planned reorganization by reinforcing its commitment to the region, stating, “Credit Suisse remains committed to providing a range of banking services to the MENA region. We continue to be proactive about monitoring the size of our business relative to client opportunities and market conditions. This involves realigning resources to growth areas and adjusting capacity to meet client needs and to manage costs across our businesses.”

This type of reorganization is becoming common across the industry, as firms look to reduce costs by consolidating operations. While firms may have had offices in several countries within a region in order to serve customers more closely, the cost is becoming prohibitive as activity slows. This is resulting in larger, more efficient regional offices.

Rumor Follows Significant New York Cuts by Credit Suisse

Just a week before the rumor of the Middle East shuffle for Credit Suisse, the bank announced substantial cut backs in its Manhattan offices. In the United States, the bank expects to reduce its headcount by 120 employees as part of a plan to control costs throughout the organization. In October, Credit Suisse told investors that it intended to cut one billion Swiss Francs in ongoing operating costs by the end of 2015. These cuts are incremental to additional announcements of 3 billion in savings announced earlier in the year.

What Does This Mean for Investment Banking Job Seekers?

The ongoing news from around the world is certainly not painting an optimistic picture for those seeking employment in the investment banking sector. Most institutions are in a period of consolidation, meaning reduced staff levels and combining regional operations in order to reduce costs. Over 300,000 investment bankers have lost their jobs over the last two years, signalling fierce competition for the few jobs available today.

However, the definition of investment banking is fairly broad. Included in the industry are some segments that are actually experiencing some growth, including fixed income trading and origination as one example. Opportunities do exist in these specialities for those with a track record of success and strong experience, though competition from a very large candidate pool may be intimidating.

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