Layoffs and Headcount Freeze (London)
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?
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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