Morning Coffee: The banking job cuts will happen after Christmas. Junior banker on $120k salary really appreciates all the free granola bars
Job-cutting season is upon us. As bonuses sidle into line of sight, banks have a well-worn playbook of chopping people so that bonuses will be bigger for those who remain. It's happening this year, but not to the extent you might expect.
With investment banking revenues at many banks down around 50%, it might be expected that this would be one of the most brutal years for job cuts for a while. It's not. Credit Suisse is going at it, cutting 2,700 jobs before Christmas, but other banks are taking it easy. There will be a few cuts before Christmas. Most, however, will happen after.
“Senior bankers are expecting to do another round of redundancies next year before bonuses are paid to reduce costs to further match the deal environment," headhunter Stephane Rambosson told Financial News. For the moment, no one (except Credit Suisse), wants to cut much beyond 5%, a banker added.
People on the ground seem to appreciate this. Speaking last week, one Barclays junior said the few cuts that are happening now won't be the last. Cuts will go "on and on," he said. Similarly, even if Credit Suisse succeeds in jettisoning 2,700 people before Christmas, it won't be the end of it - 9,000 cuts are planned before 2025 and more are expected before bonuses are announced in February. None of the salespeople in the securitized products group are likely to go to Apollo, for example.
The upshot is that people are in for a protracted period of worry. Even if you survive this round of layoffs, you may not survive the next. And if deals don't come back soon in 2023 the flood gates could really open. Banks are delaying because they're wary of chopping too hard: “It’s not like 2009, if things pick up then banks will regret deep cuts,” a banker told Financial News.
Separately, Business Insider has spoken to an anonymous first year analyst at a boutique firm who sometimes works until 4am but feels the $120k salary, likely large bonus and various perks more than compensate for this. As well as spending $3k on team meals in restaurants, the firm offers free lunches and free snacks. The former might comprise 100 pizzas. The latter is all about gratuitous granola bars and unlimited drinks. "I know this sounds kind of ridiculous. Are free granola bars really a big deal? Maybe not. But I think it does contribute to the quality of life at this bank," the analyst enthuses.
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“FTX seemed completely unprepared for a bankruptcy and the state of internal records appear chaotic.” (Financial Times)
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An Excel spreadsheet problem meant Iceland priced the sale of its stake in Islandsbanki too low. Numbers were seen as text because of commas and the sheet didn't include some high offers because they weren't registered as numerical information. (Bloomberg)
Elon Musk says he's overworked:“I have too much work on my plate, that is for sure.” He tweeted: "I’ve been at Twitter SF HQ all night. Will be working & sleeping here until org is fixed.” (WSJ)
Mark Wahlberg used to wake up at 2.30am, now he wakes up at 3.30am. He doesn't eat anything for 18 hours. “I don’t have to do as much cardio, I don’t have to spend as much time in the gym and I feel like I’m getting better results.” (WSJ)
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