So you're a redundant Hong Kong i-banker: Look on the bright side, at least you've propped up the bonus of an overachiever
If you can reduce costs by firing underperformers, now is the time: That's the simple equation for many international banks in Hong Kong as they approach bonus season in a thrifty mood thanks to a dire global economy and their own financial woes.
Some of the cash they save by chopping their deadwood is being funnelled into preserving the bonuses of the high-achieving bankers that firms are desperate to retain. "Expectations are that overall bonuses levels will be down this year and firms are trimming ranks to preserve a healthy-enough pool for their key people," says Rafael Brana, associate, Bo Le Associates.
Pressure is coming from head offices in the US or Europe to keep Asian costs in check while markets are tough, says Warwick Pearmund, senior consultant equities, Advantage Professional.
"Global banks are saying 'what's my bottom line in Hong Kong?' so they are distinguishing more than ever between performers and non-performers. They don't want the bad performers to dilute their bonus pools when they don't have much money to play with in the first place," says Pearmund.
Another headhunter, who asked not to be named, believes layoffs are continuing at a number of firms, including HSBC, Credit Suisse, J.P. Morgan and Daiwa. "And UBS is a big, nervous place at the moment, with some voluntary departures too," he adds.
Pearmund says: "It's not blood in the water in Hong Kong by any means, but rather a drop, drop, drop of redundancies."
There have been redundancies across many firms in Hong Kong recently, especially in equity research and investment banking, says Brana. "Expensive execution people in teams with low pipelines are now at risk. For example, some VPs who sit just under the rainmakers have hit a wall because the deals aren't flowing into them in this market."
