Massive Layoff in Sales Trading Coming?
Looks like my Bloomberg terminal headline today is there will be a massive layoff in Goldman Sachs soon. Second time this year. Goldman Sachs already cut a lot of fixed income traders in past two years. Rumors say if volatility in rates and credit market won’t sustain in following years, then there will be a tremendous amount of layoff.
Have you heard anything about the bloody layoff in sales trading that goi to happen in next two years?
Are you also going to comment on the fact that S&T saw it's highest uptick in headcount in the last decade in the past 2 years or are we just going to focus on the "cuts". That's like saying oh wow this company missed earnings...after 2 record breaking years. Context matters. This is a cyclical industry. Cuts happen in S&T, IB, back office, middle office, everywhere, it's not just S&T. The fact that cuts have not yet happened during the worst pandemic in the last 100 years, and headcount actually grew during that time period in S&T, shows that banks value S&T staff handling high vol and being there for clients in times of stress. The reason I have this tone in my response is because you (if I am not mis-identifying you) post almost weekly with a doom and gloom outlook on S&T - when the vast majority of FICC (at the top shops) is doing great and has a bright future GIVEN that you are able to secure a seat. If you are on a good desk at a good bank, your odds of getting cut are very, very small unless you are very senior and just clipping bonus w/ little P&L.
Because, like you said, this message board loves to bash S&T in particular, and spread the fear porn associated with the industry. It’s funny because S&T still objectively pays much more on average than most jobs
Not necessarily true. If you look sales trading jobs addition, more quant and developer type of jobs instead of trading jobs. However, if you are a quant or developer, pay is not so good in a bank.
When bank talk layoff, they always start with expensive traders. Many desks no longer need prop type of traders so bank will try to automate it or replace the position with cheaper juniors.
Sales trading headcount likely to continue increase, but many of them are low pay quant and front office developers.
Traders headcount are declining, that’s a systematic change will last forever.
Don’t overlook senior quant and developers in your desk. Many of them are richer than you!!!
Do you know 10 years ago you can easily get paid more than half million as a quant or front office developers? They bought a lot of real estates, blue chip stocks at very low price, now many of them have a net worth of more than 10 million dollar!!!!
Much harder for younger people do it now. Tax is higher, cost of living is higher, less money is saved, blue chip stock is overvalued, real estate price didn’t go up recently.
I’d rather born 10 years earlier to work as a quant than being a trader now.
Why the fuck are Investment Bankers up in here projecting their internal bullshit? Don't comment on what you don't know.
Uptick in hiring is temporary and markets revenues will return back to normal aka long term secular decline. Banks have been poaching strategic hires, so the net effect is zero as directors play musical chairs.
Banks have already given indications that there will be no bonuses this year, headcount is going to decrease b/c folks can work at home, potentially more regulation, increase on technology/digital spending, and getting ready to take cushion the loan book.
HSBC and Natwest have already gotten out of long dated products. This would have been unthinkable 10 years ago and the fact that they are global banks helping to facilitate the financial system's fundamental collateral/risk-free rate.
I'm in S&T, bud. Just haven't updated my handle. "There are going to be no bonuses this year" - you at Nomura or something? Literally everyone I know is expecting to cash out + Bloomberg literally drops an article a week on how FICC traders are going to see bonuses skyrocket this year.
"Revenues will return to normal" = long term decline? Some years revs are up, some are down, most are normally distributed - that's literally any business model that isn't high growth (finance isn't it's not 1980).
"Potentially more regulation" - is something that I hear every single year, banks adapt.
The fact that you are using HSBC and Natwest as examples though, when I said specifically in my reply, top 7/10 banks in any specific product, actually makes me regret typing up this response because either 1) you did not read what I had said or 2) you literally do not know what you are talking about.
Cheers