"They cut last year:" the bankers who fear losing their jobs before Christmas
The job cuts are coming. As we've observed here, banks are engaged in their standard practice of taking costs out before the end of the year and before bonuses are paid. The closer the year-end comes, the more febrile the cost-cutting gets.
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It's not just HSBC. Jefferies has cut its co-head of Asian and European emerging markets. The Financial Times reports today that Deloitte plans to cut 180 jobs in its advisory business due to poor market conditions. Citi keeps cutting managing directors in financing. BNP Paribas has been cutting credit traders in New York and bankers in China.
As January approaches, people with long(ish) memories are recalling the events of previous years, and holding tightly to their seats.
"I'm sure there will be cuts before the end of the year," says one mid-ranking banker at Santander in London. "There always are," he observes. "But this year they will be performance-related rather than anything else."
Last year, it wasn't just Santander that cut before Christmas. Barclays and Citi did too, along with Credit Suisse. The difference between this year and last is that in investment banking divisions at least, cuts are not being driven by faltering revenues. Research by BCG Expand suggests that revenues across M&A, equity capital markets and debt capital markets are up an average of 42% per person year-on-year in 2024. If you're cut from a banking job this year, it's more likely to be because of underperformance - or politics. This could make it harder to find something new.
Some bankers are likely to be safer than others over the next few weeks. Deutsche Bank's bankers are unusually unproductive according to research firm Tricumen, but Deutsche doesn't pay its bonuses until March, so the bank will be in no hurry to trim anyone before Christmas.
Barclays' London bankers might want to polish their CVs, though. M&A bankers at the British bank are thriving, but the bank still has costs to cut. It also has form: Barclays cut jobs in either November, December or early January in 2023, 2022 and 2021. The British bank has a history of cutting before bonuses dating back to 2014. There's little reason to think this year will be different.
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