The New Face of Trading – Fewer, Younger & Cheaper

November 14th, 2014

London based market research and analytics firm Coalition published research today showing steady declines in staff at the world’s biggest investment banks.  According to the report, the top ten largest investment banks have seen staffing declines for the past four quarters, with a 10 percent drop in fixed income, currency and commodity (FICC) trading staff year-over-year.  Furthermore, Coalition predicts that these cuts could decline as much as ten percent over the next four quarters.

Cuts appear to be concentrated among the senior management ranks, with many firms replacing these positions with more junior staff.  Coalition states, “More restructuring has been completed, but pressure on costs remains intense across the industry, both to improve returns and balance sheets. Banks have also been substituting senior staff with more junior levels, to maintain their commitment to graduate hiring as well as reduce costs.”

Given that investment banks facing mounting investigations and losses, these staff reductions are no surprise.  For example, over the next year, Barclays alone is expected to cut 7,000 jobs from its investment banking unit.  FICC in particular has seen a difficult year, projected to lose four percent for the 2014 trading year. With banks trying to run a leaner business, while adapting to a new market and massive regulatory burdens, staffing changes can be expected for the next year or so.  Anticipate shrinking senior staff and senior salaries.

 

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