So let’s not sensationalise the headlines as all negative. Opportunities exist!
The news coming out this week from some of the major players in the banking industry has not been half glass full at all! Take the announcement this week by Bill winters at Standard Chartered bank to cuts to its global workforce by 15,000. The reaction is immediately one of negativity and how will this impact me in the UK. The reality is not much. Standard Chartered bank employs 86,000 staff globally and most of those are domiciled outside the UK. (Asia and Africa) In fact there is only 1,800 staff based here in London. The other point to note while these cuts are occurring as part of a major restructure 1 Billion is being invested into other revenue streams such as Retail Banking, Private Banking and Wealth Management. So let’s not sensationalise the headlines as all negative. There will be opportunities to grow new product lines into new markets and potential new hirers.
Deutsche Bank too led the charge with powerful headlines of 15,000 job cuts across its businesses. 9,000 permanent staff and 6,000 contractors. However the need to panic is not quite as it seems 4,000 of the job losses will be head quartered out of Germany not the UK and the numbers of closures in business are occurring in places like Malta, Argentina, Chile, Mexico and New Zealand. On the flip side DB is looking to invest at least a Billion in spend going digital with its technology. This will undoubtedly create new revenue opportunities, platform efficiencies and new propositions for its client base.
The other large Investment bank to announce headcount reduction was Credit Suisse’s CEO Tidjane Thiam. Here CS is looking to strip out £3.5 billion in costs which will result in at least 2000 job losses in its London UK office (approx 14,000 globally). Again, large numbers of the reduction coming outside the UK head quarters. The positive spin is that Thiam has announced a strategy to grow its wealth management business trying to model recent gains that have been made in this portfolio in the Asia Pac region. The ultimate goal is for CS to improve long term profitability on a more consistent basis at the same time reducing capital expenditure.
So are we heading for a period of contraction in hiring for the short to medium term? I do not believe so. Banks are always looking for a competitive advantage whether it be through technology, products or markets. I think 2016 will see more investment into these 3 areas and with external regulations continuing as in 2015 it’s unlikely we see a fundamental change to the hiring needs moving forward.