Aren't There Going to Be Massive ECM Layoff?
Just read that there might be Goldman layoffs coming up. And speaking of layoffs, how have there not been more EMC layoffs? I've heard ECM activity is off something like 90% YOY -- doesn't this indicate that massive layoffs might be in near future? Or do banks assume things have to get better, so they figure it's better to keep headcount high?
Yes - but most banks are large bureaucracies so these actions take time to set in motion. Just like there is a 6-9 month hiring lag when things are up there is the same lag when things fall off a cliff usually.
Definitely not massive layoffs.
Most ECM teams are very thinly staffed to begin with, and during covid were short-staffed to the point of almost not being able to execute transactions. Need to make sure once dealflow does come back that there is a team left.
If push comes to shove, it's fairly easy to execute a transaction without an M&A team, but basically impossible to execute an IPO without ECM or coverage.
definitely large layoffs lmao... god i love watching people trying to rationalize this shit
I think you don't understand how small each sector's ECM team is.
If you have 10 people per sector in ECM relative to 80-100 in coverage, I don't really see how you can have "massive" layoffs. If the consumer ECM team only has 2 directors, you're not going to lay off both... I wouldn't really consider laying off 1 vp and 1 MD per sector as massive layoffs, but that might be half of the senior ECM team.
Interesting to hear the different perspectives. I guess my instinct is that, if there were going to be massive layoffs, they would have already happened. I say this bc you have to assume activity is going to pick up by at least next March, if not sooner -- by January there is decent/good chance Fed will be done raising rates, and might even start cutting them by next spring. I would imagine there will be pent up demand to go public, and -- if rates stop rising -- equity markets will respond positively, which will also motivate banks/clients to start going public again.
Agree with this. There's already demand building to go public, some ready to go as early as 4Q, no point in mass layoffs if you see work coming in the next 6 months. Yeah the underperforming people will get cut, but ECM is a small team to begin with. Not like they're going to be cutting entire teams
Demand to go public? Where?
The Fed will keep raising rates through next year.
at least in Asia, the Pipeline for IPOs is visible in the next year - so some banks are holding onto staff
think there'll be some firing, but won't be much. bonuses might be hit drastically though
Doesn’t Goldman lay off the bottom 5% of its employees every year? 500 bankers doesn’t sound like a “massive” layoff.
This. The media has been bothering me all day acting like this is massive news. they paused layoffs during Covid and then didn't resume them because they were desperate for bankers. cutting a small number of their bottom feeders (mostly deadweight VP/D) is nothing new for GS
Yeah I wonder how much of this is finally just getting a little more staffed up on things.
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