| HONG KONG, June 25
HONG KONG, June 25 Investment banks and
brokerages across Asia have launched a sweeping round of job
cuts as Europe's debt crisis and China's economic slowdown bite
into the region's financial activity.
Speaking to bankers and other industry sources, Reuters was
able to confirm at least 50 people were let go in the past three
weeks, a cull that includes senior expatriates as well as junior
bankers. The cuts mainly target the equities business, with more
layoffs expected in coming weeks.
CLSA , Deutsche Bank, Goldman Sachs, and
UBS were among the banks and brokerages that cut jobs,
the sources said.
"In response to a market environment far worse than
anticipated and considerable over-capacity in the industry, we
have made the difficult decision to make some positions
redundant," said Anna Tehan, a spokeswoman for CLSA.
CLSA, an Asia focused brokerage, has prided itself over the
years in keeping cuts low, with employees previously taking
voluntary pay cuts to stay on board.
"A very small percentage of our workforce is affected, from
across all areas of the business," Tehan said, adding that the
firm would not comment on specific reduction numbers.
Two sources at CLSA said tens of jobs were cut across the
region in the last two weeks, with one saying specifically they
included 25 staff in Hong Kong, and 10 in India across sales,
core research and the new India Reality Research division.
"Banks have cut 5-7 percent of staff, which is unusual as
this cut usually happens in November and December," David Azar,
managing director, equities at recruitment firm Pemberton
Stewart, wrote in an e-mail, describing the round of layoffs.
"We see more cuts in the next few months."
Asia, where banks staffed heavily in the last few years to
capture the growth of developing economies, saw cutbacks at the
end of last year as deal and trading activity slowed in the wake
of early signs of Europe's woes.
But the latest round of layoffs comes as hopes for a strong
first half faded quickly after the first quarter. China's
slowdown in growth, after years of supporting the surge in
Asia's financial activity, has hit particularly hard.
The Asia cuts also come at an unexpected time, when
expatriate finance professionals are preparing to hunker down
for the summer while their families head home for the holiday.
"I'm disappointed, but in some ways I'm glad I was cut early
in this round, because everyone is looking over their shoulder,"
said Cassandra Lister, who was recently let go as a managing
director at Societe Generale in Hong Kong. "They're
looking around and wondering 'Am I next?' It's a horrible work
Like all regions in the financial industry, Asia usually
sees a year-end trimming of headcount. After the 2008 financial
crisis, many banks cut from the bottom, firing junior staff to
keep numbers low while the workload was light.
In the current wave, more senior and expatriate bankers are
leaving, a trend that gained steam last year amid a sharp focus
to retain roles that were either client-facing or revenue
generating, preferably both.
MOSTLY IN EQUITIES
The emphasis on cuts in equities divisions is unusual for a
market driven by stock sales and issuance, but reflects how weak
Asian markets have been this year.
Equity market activity typically generates around
three-quarters of annual revenues for an investment bank in
Asia. Although debt issuance is robust in the region this year,
equity capital markets are struggling -- a fact keenly noted by
bank headquarters in New York and London that have shelled out
loads of money for Asia expansions in the hope the fee pool will
"The Street has never had to come to grips with the cost
base out here until now," said the top Asia executive at an
investment bank, who did not want to be named. "The U.S. office
doesn't want to subsidise Asia anymore."
While pockets of Asia have seen bursts of financial market
activity, such as Japan and Malaysia, China's slowdown has had
Equity capital market deals in Asia ex-Japan, including IPOs
and follow-ons, are down 47.5 percent in 2012 through mid-June
to $67.8 billion, according to Thomson Reuters data. In Hong
Kong alone, IPOs have had their slowest start in about four
years with deal volumes down 85 percent in the first five months
of the year.
Some of the layoffs were at Deutsche Bank in Hong Kong,
which trimmed numbers recently in what a source described as a
'hangover' from the 500 job cuts that then CEO Josef Ackermann
said in October last year would take place in the firm's
Corporate Banking and Securities division.
Sources familiar with the matter said that the bank fired at
least three people in the Hong Kong equities division earlier
this month. They included Michael Bugel, a managing director in
equity sales, Tom Clapham, a director, and Hue Lu, an analyst.
In India, one of the sources said, the bank sacked a total
of five junior bankers in the equity sales and research teams.
These cuts followed the departure of three bankers in
another division, equity capital markets, including China equity
capital markets co-head Will Li. A source familiar with the
matter said that Li had accepted voluntary redundancy, and would
move to the fund management industry.
On June 13, veteran debt capital markets banker Patrick
Tsang resigned from the firm as head of fixed income capital
markets, in what two sources with knowledge of the situation
said was a move unrelated to the job cuts in equities. Tsang
will leave the financial industry, the sources said, and will be
succeeded by global risk syndicate head Herman Van den Wall
On June 15, UBS's Guy Wylie became the second capital
markets head in a week after Deutsche's Tsang to resign, with
the firm electing not to replace him and instead have the debt
team report directly to Joseph Chee, head of global capital
markets in Asia. That move eliminates a layer of management and
will reduce costs at the Swiss bank.
Goldman cut six staffers in Australia in the last two weeks
- a mix of equity sales, analysts and equity desk employees,
including equity sales trader Mark Steer, two sources said.
Aside from CLSA, the banks mentioned in the story declined
"A lot of people are bored. If you're in sales, no one is
calling. If you're a trader, there's no flow," said a financial
services recruiter who did not want to be named.
Lister, the former Societe Generale banker, said that unlike
2008, when Asia bounced back quickly from the global crisis, the
current European debt crisis exposes deep, structural issues in
the financial system.
Nevertheless, she believes Asia is still the best place to
be for an executive in the financial industry.
"From a professional standpoint, I felt my job wasn't
completed. I had just started building relationships with
clients and colleagues," said Lister, who was at the bank for 18
With few banks hiring, smaller boutique operations may
welcome job seekers, as senior bankers are seeing less
opportunities within the major institutions.
"We've been approached by several people at the managing
director level from bulge bracket banks in the last 3 months,"
says Chris Leahy, co-founder at strategic advisory group
Blackpeak, referring to the top financial institutions.
"One senior M&A banker told me that he thinks the gravy
train is over for many bulge bracket bankers like himself and
that he might better be able to monetise his contacts and talent
at a smaller firm," said Leahy, himself a former investment
banker and head of Kroll in Asia.