Yesterday I was asked by an incoming intern at my bank about what was the outlook of IB, which teams would be affected in M&A Coverage and if ECM/DCM/S&T would be affected.
I was not sure as I have only worked for 2 years and never been something similar before.
My answer was that headcount would get reduced, layoffs in ECM/ S&T and potentially in energy, O&G and consumer.
Do you feel the same in the street?
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I've heard headcount freezes are in place, have not heard of any layoffs in IB yet.
Do you think return offer rate for O&G groups will actually be affected since its a cyclical industry? Banks are considering what's gonna happen in a year when SAs start full time instead of what's going on right now. I'm an incoming summer at an EB energy group with decent RX platform (US), hopefully I don't get screwed because what's going on right now
Hiring freezes make sense, but layoffs seem short sighted. This isn’t a banking or financial crisis like 2008. Yes, there likely will be a mild recession, and volatility is through the roof right now, but if things are relatively back to normal in 6-12 months then banks, and other industries, will be scrambling for talent if they go laying off in masses.
Banks lay off under-performing staff all the time. Interestingly they laid off more people than normal in 2019 in anticipation of a slowdown in 2020. They definitely weren't anticipating that as the result of the virus but seems rather prescient now. Ironically, dealflow itself was just fine until this hit but I guess my point is there isn't as much fat to trim and it's early days. If this runs its course by summer, they could probably control headcount issues through a freeze. If the economy continues to be on life support for the remainder of the year, I would bet money there will be layoffs
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