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Yes. Next?
What's the reason for downsizing?
Will the industry ever stop shrinking and start increasing in size?
Should people be worried about the financial industry shrinking?
automation has reduced the need for people in most cases...plus outsourcing grunt work to lower wage countries
But you cant automate away FO positions can you?
Not in IB so this might sound stupid, but, isn't there a platform(s) or companies that you can hire in India that will turn comments on your decks? Not that this would make any difference on headcount, I don't think banks would ever outsource that stuff, but I'm just wondering how prevalent that is within analyst classes, to literally pay them to do your work for you
What keeps the company from cutting out the middle-man and just outsourcing the work themselves?
I only feel qualified to speak for AM, but we are being squeezed from all sides.
Basic off the shelf technology is squeezing at the low-end. Automation is squeezing basic ops positions
At the same time, quantification of active strategies is squeezing the high end. Why pay expensive investment teams when you can take their algo and just run it for cheap? This is a $15B fund. It takes in $30M in fees per year, despite a low 20bps fee. Try to find out who the PM is: https://www.invesco.com/portal/site/us/investors/etfs/product-detail?pr…
Finally, Industry consolidation is squeezing the middle. Economies of scale, and investors demanding lower fees have pushed consolidation. When two companies merge, you get to eliminate a website, and all the support staff. Compliance, Product Development, Marketing, etc. staff all decrease too.
IB and PE are pretty safe from automation and outsourcing so I'm still a bit curious for as to why their headcount is decreasing.
Great input, put it into much better perspective for me.
To my point, I was thinking that banks would not outsource that work because of reputation? Not sure. I mean they strive to hire the hardest working and brightest kids into the analyst classes -- which shows that they can do good work. When you outsource that work to emerging countries I guess some people would think that it's lower quality. Ultimately the clients who they're presenting the deck to wouldn't know, so I guess it doesn't really matter.
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