UK
And so the axe falls
24 January 2008
After flagging redundancies last week, Citigroup, Deutsche et al are now putting their plans into action. The good news? It’s worse in the US.
The Financial Times this morning reports that Citigroup ushered 400 London staff out of the door yesterday. City AM points out that the move was fortuitously timed to coincide with bonus day.
Separately, sources say the likes of Deutsche and Calyon have also begun sweeping clear-outs, with legions of ABS and CDO professionals said to be on the move. The Times reports that Bank of America will be next, and that bonus announcements at the bank have been delayed until Monday.
Citigroup’s cuts, 150 of which apparently fell in the investment bank, are said to have disproportionately, but not exclusively, impacted the fixed income department. Financial News reports that equity research staff were also affected as 200 companies were wiped off the coverage list (now might be a good time for a few of Citi's exes to get in touch with Macquarie).
Spare a thought for Wall Street
However bad things are here, they’re almost certainly worse in America. Citigroup plans to make 4,200 cuts in total, many of which are expected to hit the US consumer unit.
Challenger, Gray and Christmas, a US outplacement company, calculates that 153,000 financial services jobs were lost in the US last year, rather more than the 8,000 jobs which the CEBR is apparently now predicting will go in the City in 2008.
One headhunter covering the transatlantic beat says investment banking redundancies to date have been divided between New York and London in the ratio 2:1: “The reality is that a lot of the losses stem from the US.”
Challenger, Gray and Christmas chief exec John Challenger says the situation on Wall Street is now worse than in 2001 and 2002: “Entire business areas are now moribund and people are very pessimistic about their futures.”
Things are liable to get worse long before they get better. The European head of one US boutique says further rounds of redundancies are being planned for May and June.
