Morgan Stanley has started to lay off MDs from its investment bank in Asia this week as part of its global cull of 1,600 jobs.
Nick Strain, head of institutional sales in Asia for FX and emerging markets, has joined a growing list of retrenched Morgan Stanley MDs, according to a Hong Kong headhunter, who asked not to be named because of confidentiality. “FX is/was making money, so I see the redundancies as politically coming from head office,” he adds.
Sam Thong, head of healthcare, is also leaving the US bank, says another Hong Kong recruiter, who adds that the redundancies will eventually total about 15 percent of Morgan Stanley’s IBD workforce in Asia. “They are trying to save money for bonus pools,” he says. “This large headcount reduction is overdue. In the last year MS was trying to preserve Asian headcount in hope of a market pickup which hasn’t happened.”
He also says that in greater China Morgan Stanley has so far laid off five VPs, four associates and seven analysts in teams including global capital markets, natural resources and technology.
Earlier this week, quoting unnamed sources, Bloomberg reported that Hong Kong-based Saul Raccah, Asia-Pacific head of oil and gas, and Leon Guo, director for real estate, focusing on China, were among the MDs being let go.
A spokesman for Morgan Stanley in Hong Kong would not comment, other than saying the Bloomberg article, which also predicted a 15 percent headcount contraction, was “broadly accurate”.
More cuts to come
Morgan Stanley is not the only Western bank making redundancies in Asia: Credit Suisse, Bank of America Merrill Lynch, UBS and HSBC also cut back in late 2012.
“Asia remains susceptible to whatever happens to Europe and the US,” says Annie Yap, managing director of AYP Asia Group in Singapore. “There's a domino effect on major banks that are cost cutting globally – they will trim more staff than expected in Asia. IB jobs across the board, from front to back office, are highly insecure.”
Damian Babis, director of Capital People in Hong Kong, adds: "Banks have been holding onto their headcount here, but now they have to reduced cost globally, Asia is under threat."
Singapore is even more vulnerable to redundancies than it was during the GFC, says Craig Brewer, director, Hudson Singapore. “Back then it was still considered a low-cost location for many of the foreign banks; now it’s not. Banks can save a lot by cutting from the front office and many of these jobs won’t come back. Offshoring continues for support roles.”