A trader, center, wears a Citigroup jacket as he works on the floor of the New York Stock Exchange (NYSE) in New York.
Michael Nagle | Bloomberg | Getty Images
Global Investment Banks Citigroup and Barclays cut advisory and trading staff this week as Wall Street grapples with a sharp drop in earnings and a bleak outlook for next year.
New York-based Citigroup laid off about 50 commercial employees this week, according to people with knowledge of the moves who declined to be identified speaking of the layoffs. The firm also cut dozens of bank positions amid declining trading activity, Bloomberg reported on Tuesday.
London-based Barclays cut around 200 positions in its banking and trading offices this week, according to a person familiar with the decision.
The moves show the industry has returned to an annual ritual that is part of what has defined life on Wall Street: removing workers seen as underperforming. The practice, which had been halted in recent years amid a deal boom, returned after Goldman Sachs laid off hundreds of employees in September.
Although shallow in nature, especially compared to the much deeper cuts occurring at tech companies such as Meta and Stripe, these moves may only be the start of a trend if capital markets remain moribund.
Equity issuance fell 78% this year through October as the IPO market remained essentially frozen, according to data from SIFMA. Debt issuance also declined as the Federal Reserve raised interest rates, falling 30% through September.
No reprieve in 2023
In recent weeks, executives have turned pessimistic, saying earnings from robust activity in parts of the fixed-income world have likely peaked this year and equity earnings will continue to fall in a bear market. actions.
“Most banks are forecasting lower revenues next year,” according to a person responsible for providing data and analysis to the industry. “Investors know the general direction of the market, at least in the first half of the year, and it is believed that customer demand for hedging has probably peaked.”
Among the beleaguered Wall Street gamblers Swiss credit is grappling with the deepest cuts, thanks to pressure to overhaul its loss-making investment bank. The company said it will cut 2,700 employees in the fourth quarter and aims to cut a total of 9,000 positions by 2025.
But even workers working for the winners on Wall Street – the companies that have won market share from European banks in recent years – are not immune.
Underperformers may also be at risk JPMorgan Chasewhich will use selective year-end cuts, attrition and smaller bonuses to rein in spending, according to a person with knowledge of the bank’s plans.
Morgan Stanley is also reviewing job cuts, although the extent of any possible downsizing has not been decided, according to a person with knowledge of the company. Lists of workers who will be laid off have been drawn up in Asian banking operations, Reuters reported last week.
To be sure, officials at Barclays, JPMorgan and elsewhere say they’re still hiring to fill in-demand positions and are looking to upskill positions amid shrinking industry.
Spokespersons for the banks declined to comment on their personnel decisions.
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