Jobs axe hangs over investment banks in Asia
HONG KONG (Reuters) - Investment bankers in Asia fear more job cuts in the next few weeks, having largely escaped the latest global layoffs that hit colleagues in other regions.
Layoffs in the industry could soon slice more than 1,000 jobs at Wall Street and European banks in Asia, industry sources say. Several hundred were wiped out here in the past month.
"It sounds like it's already starting to get bloody," said a Hong Kong hedge fund manager who works with investment banks.
Among the banks likely to be hit hard is Merrill Lynch, sources say. Its job reductions in Asia so far have been relatively small and the Wall Street bank is weeks away from being absorbed by the rescue of Bank of America Corp.
But Merrill is not alone, according to sources who asked not to be named as they work at or with investment banks.
They said Goldman Sachs, even after recent layoffs in Asia, is not done yet.
Citigroup and Morgan Stanley have also shed jobs in Asia and, while some sources say these banks can maintain headcount levels through the first quarter, others aren't so sure. The first and second quarters of 2009, globally, are expected by bankers to be worse than the last two.
If the banks don't move soon to reduce headcount, they are likely to strike at the end of the first quarter.
The corporate scythe set to swing through Asia's investment banking industry highlights how quickly growth has slowed or, in some cases, stopped across banking divisions in a region that was thought to be thriving less than a year ago.
"Where it was somewhat more active through most of the year, Asia is slowing down. People were insulated, but now it's getting to the point where everything is declining at once," said the hedge fund manager.
All banks mentioned either declined to comment or did not return messages seeking comment for this article.
Merrill and Morgan Stanley handed out year-end pay in the last week, sources say, with some bankers earning bonuses in an otherwise dismal year. The bonuses, in many cases, were less than expected, though many were happy to get a bonus at all.
For those who got no bonus, bankers say they will either take the hint and leave or accept that it may be a while before they receive a hefty year-end sum.
An investment banker typically earns a low, six-figure salary but is eligible for a $1 million bonus or more.
Banks often cut staff before granting bonuses to save money. Citi, Goldman, Credit Suisse and Deutsche Bank are due to give bonuses at the beginning of next year. Continued...
