Big banks bleed off jobs over summer
For some investment bankers in Hong Kong, this year's summer breaks aren't turning out to be a welcome holiday.
Over the past few weeks, about 10 big banks, including Germany's Deutsche Bank, Asia-focused brokerage CLSA and two big old-line Swiss banks, Credit Suisse and UBS, have quietly laid off staff.
Rather than do mass lay-offs that generate headlines, the banks have been picking off small numbers of their employees - fewer than 10 people in most cases - since late June, according to people familiar with the matter.
Most have been relatively junior equity-related staff, cut because of the fall-off in business from weak global stock markets, and given payouts of between one and three months.
In total, several dozen jobs at these banks were quietly eliminated. The timing is also unusual. Typically, banks make staff cuts at the start of a new year, or before the end of a fiscal quarter or year-end to meet budgets.
Other banks that have trimmed staff in recent weeks include Royal Bank of Scotland and Societe Generale. DBS Bank, which had tried to expand aggressively outside its home market of Singapore in the past few years, also trimmed staff, sources said.
July to August is widely considered in the financial industry as the unofficial summer holiday season when markets are quieter and bankers take their annual vacations. But now bankers are wary of taking time off lest their job disappear while they are away.
'Generally speaking, the sentiment is not good and I will say it is getting scarier. When you go to meet a friend who is also working in the financial industry, he will perhaps start the conversation with, 'If you hear anything about lay-offs ...',' one of the sources said. 'People want to know who will be next.'
Last week, Deutsche Bank sacked four more people in its back office. That followed four other sackings in the bank's Hong Kong equities division in early July, the sources said. Deutsche Bank employs more than 18,000 staff in Asia, about 2,000 of them in Hong Kong. Deutsche Bank declined to comment.
Around the same time, Mitsubishi UFJ Financial Group (MUFJ), Japan's biggest bank by assets, ceased its Asian equities research service.
A MUFJ spokeswoman confirmed the decision affected 'fewer than 10 staff'. However, she added: 'We are not pulling out of the Asian equity business.'
Meanwhile, bankers in Europe and the US are bracing for a wave of lay-offs. Bank of America Merrill Lynch and Barclays Capital are two names often cited by financial industry headhunters as likely to make staff cuts worldwide in the next few months.
Asked to comment on Barclays' Asian operations, a spokesman said: 'We remain totally committed to building on our successful franchise in Asia.'
Barclays Capital is under scrutiny for its role in the scandal surrounding the fixing of Libor, the London interbank offered rate, which has triggered several top-level resignations, including chief executive Bob Diamond, who personally recruited several of the bank's senior staff in Asia.
Bank of America Merrill Lynch is still struggling to integrate its 2008 merger. Bank of America Merrill Lynch declined to comment.
In January and February, several major financial institutions, including Daiwa Securities, Japan's No2 brokerage by revenue, and Macquarie, Australia's top investment bank, downsized some of their operations in Hong Kong, which resulted in hundreds of job losses.