Banks seen cutting jobs in London and New York City
It's happening again. As fears about job cuts in the third quarter of 2022 mount, some banks have already commenced a little trimming.
Sources say that RBC Capital Markets is cutting a few people from the London-based operations team supporting its global markets business. The cuts, which are understood to amount to less than 2% of its London headcount, are happening as the bank shifts roles to its centers of excellence in Malyasia and Halifax, Canada. RBC declined to comment.
In New York City, Berenberg has also been spied cutting jobs. The German bank filed a WARN notice last week stating that it's letting go of 47 employees at its Manhattan office in Avenue of the Americas due to "economic dislocation." Berenberg is targeting $1.5bn in annual cost savings by 2024.
Last week, Credit Suisse said it will be cutting staff in the second half of this year after making a loss in the first and second quarters. CEO Thomas Gottstein says the bank is prepared to cut technology staff, middle and back office staff and some front office staff to save costs. Credit Suisse won't be cutting risk and compliance functions, not least because it's now on an FCA watch list the UK.
UBS cut some ECM jobs in March. And Chinese banks have begun throwing some staff overboard in Hong Kong.
The latest cuts come amidst fears that banks will be compelled to cut headcount aggressively later this year. In areas like equity capital markets and leveraged finance, revenues are down considerably - and not just on the unusually good year that was 2021, but on the longer term norm of the pre-COVID years. "If we're in a similar situation in September, jobs will be cut," one director in leveraged finance solemnly told us last week.
While it might seem that banks will cut front office jobs in areas where revenues have collapsed, the danger is that banks will also be compelled to cut roles in areas like technology and operations (as per Credit Suisse and RBC) to compensate for inflationary pay rises in the front office.
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