Citi layoffs
Heard layoffs are coming but wanted to see if anyone else knows more?
EDIT: I mean second round. I know first round has taken place.
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Already came last November in London. You talking second round?
Yes, heard there will be second round. Anything you heard?
Rumours only. Some teams are already running pretty lean, if they cut more it's going to be muscle, not fat.
News to me
Delete
Could PE offers be rescinded if you’re fired from your bank? PEs hire you with the expectation you’ll do 2 years training at the bank
Some pe firms let you know they want you to work for 2 years prior to joining.
I don't agree with the "PE recruiting market is hot due to dry power" - couple reasons:
1) The debt markets are everything when it comes to funding PE-backed deals - the LevLoan and HY markets are effectively shut right now. Sure you can you to the DLs, but they struggle to take down large deals. Further, high Interest Rates are going to a.) eat into returns (will less LP capital be allocated to PE as a result -- will some funds struggle next fundraising round??); b.) make EVs go down (i.e. your exit val is not going to be as favorable in this environmentas it would've ~14mo ago). PE thrives in low interest rate environments, and high rates, partially due to the incredibly fast pace of the hikes, will absolutely slow down the PE market.
2) PE LPs (particularly the large LPs that have some sway with the GPs -- got to be cognizant of not pissing off LPs and putting fundraising at risk for that given client for the next fund) may put pressure to have the GPs not deploy capital just for the sake of doing so because of a). the LPs may think they're putting money to work at the top of the cycle (very possible rn); b.) the "dry power" isn't sitting in a bank account... the capital needs to be called upon - how do the LPs fund the capital calls? Sometimes they need to sell assets to fund the capital call - maybe they don't want to sell say the S&P down ~15% rn to fund a capital call that they believe is going in at peak EV for the cycle (private markets have yet to see the valuation haircut like the public markets have IMO - or at least not near to the extent)
3) Just the other day, there was a thread on here stating that it's been really hard to lateral to other PE shops at the Sr Assoc/VP levels (andetocal for sure, but the evidence is there that everything related to M&A in general (IB, Debt Markets, Big Law, Accounting firms (TAS - QoE), etc.) is hitting the breaks.
I think things will continue to get worse for IB, PE, and anything related to M&A over the next 2-3mo. Recession may not be 2008 bad, but a major slowdown at the minimum is here.
Deflation is on the Horizon - see Tesla price cuts the other day. RE market to follow
I think you're right that things well get worse for a few months, but that should be the bottom. There's too much money sitting on the sidelines right now that needs to be deployed, and once Fed better telegraphs rate schedule, price discovery should be more doable, and things will pick back up. Sounding like 2H23 will be when things start to come back. Companies are still figuring out what the recession and inflation and now deflation will look like to them, and we're going to go through another period of significant change with the rates being lowered and recession subsiding. Also, from what I've read, firms have capital call lines they can use to make the initial investment, but I guess LPs have to sell something eventually either way. The S&P 500 being down that much is a sunk cost. Otherwise interesting points about the LP and GP dynamic, that's fair, sure they aren't psyched about the skyhigh valuations for their PE investments right now.
Some good articles out there about expected M&A activity this year.
Deflation is a good sign!
Agree - am in the PE team of a SWF in the US and echo your thoughts on the private markets
Lol dude Citi just communicated bonuses on Thursday. Would be dumb and huge waste of money to pay bonus and fire a month later. They would’ve just done it a week ago
This
Before COVID there used to be lay-offs twice a year, in spring and in autumn
Citi did bonus and layoff at the same time in earlier cycles so can’t rule this out completely
Huh? So that means layoffs were done this month and nothing further
When?
I know someone that works in NY and says the atmosphere is terrible. People are apparently paid 0 bonuses and told they won't be getting anything (it sounds like not everyone at citi gets bonuses paid on the same day?). Analysts are being told about no headcount availability for associate and warned about not getting bonuses. Md's are talking about headcount reduction.
Weird bcos when I interned in summer 2022 in London every Analyst in my team were promoted to Associate and they were recruiting FT Analysts as well.
Thought they paid well this year
Ive been told (credible sources) that associate bonuses, for solid asociates, this year were 50-60 pct of base in London.
They werent materially higher than that last year, during a record year.
What about ny office?
where did you hear from?
Layoffs in ECM recently
Bloomberg reported up to 15% comps increase for juniors. Any insight on this?
(100%-50%) * 115% = ...
Did comp decrease by 50% from a prior year?
Haven't heard.
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