Who's at most risk of redundancy in Q4?

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Summer has all but disappeared and the much awaited uptick in investment banking activity looks about as likely as the possibility of getting a suntan in Northern Europe. This means, sadly, that more people will get fired, not necessarily for ineptitude or failure to complete dubious tasks, but simply for being in the wrong place at the wrong time. Here are some of those we judge most likely to get the chop in Q4.

Anyone at Merrill Lynch

Total net revenues in global markets and investment banking went from $6bn in Q207 to -$5.3bn in Q208, but (excluding financial advisors), staff numbers at Merrill were down only 5.2% over the same period.

In April, chief exec John Thain promised to layoff a total of 4k people, but more could clearly be done.

Merrill's reticence when it comes to redundancies can be partly attributed to the anticipated arrival of Thomas Montag , who's charged with implementing a cost cutting plan. Montag arrived earlier this month, so watch this space.

"Merrill Lynch would be top of my list for redundancies in the second half," Punk Ziegel analyst Dick Bove tells us, confirming our suspicions.

Front office bankers at Citigroup

Citigroup was quick off the blocks with staff cuts - the bank announced plans to chop 10k staff as long ago as April 2007 and promised to eliminate another 9k jobs in April 2009, 1,700 of which are predicted to come from its investment bank (Scott Miller, former head of the European leveraged finance business, is rumoured to have taken voluntary redundancy in the past few weeks).

So far, however, the focus on cost cutting has been largely on eliminating overlaps in the middle and back office.

Ominously, Citigroup is now said to be conducting another review of its cost base.

"A lot of what Citigroup has done so far in the front office in Europe has simply involved combining businesses like leveraged credit sales and investment grade sales and trimming any overlap," says Lee Thacker at search firm Silvermine Partners.

Anyone not working with German clients at Dresdner Kleinwort

Profits in Dresdner Kleinwort's investment banking and advisory business went from €65m to €30m beween Q207 and Q208. Dresdner as a whole says it's cut 1,400 people so far as part of a redundancy programme, and says further redundancies are unlikely before the end of the year. This could, however, change very quickly were someone to actually come forward and take the bank of Allianz's hands, particularly if that someone were German.

Financing teams at Barclays Capital

Something doesn't make sense at Bar Cap. Average net income per head halved between Q207 and Q208, but the bank appears to have made little attempt to trim any of the 6k or so people it's added since 2005: at the end of Q207 headcount was up 100 on the start of the year.

Rising headcount at Bar Cap is partly due to staff additions in the US, and conceals redundancies already made in Europe, but there may be a lot more cuts to come in London. "The only areas they've really cut so far are CDOs and leveraged finance, they could cut a lot more in ABS and real estate," says Thacker.

Traders and asset managers at UBS

Following the announcement of its Q2 results, UBS has promised to make additional staff cuts. With advisory and capital markets teams improving their performance, a quick perusal of its figures suggests trading staff are likely to remain most at risk. Following €15bn of withdrawals from its asset management business, Financial News is predicting redundancies in asset management too.

Needless to say, there are plenty of other people who could find themselves at the sharp end of the wedge come September. Feel free to point out any obvious omissions below...

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