As Wall Street struggles with steep revenue drops and a dimming outlook for the coming year, international investment banks Citigroup and Barclays reduced advisory and trading workers this week.
This week, the New York-based Citigroup laid off about 50 members of the trading team, according to people with knowledge of the actions who declined to be named. According to Tuesday's news, the company also eliminated dozens of banking positions due to a decline in deal-making. Approximately 200 roles were slashed this week by London-based Barclays across its banking and trading desks.
The actions demonstrate that the sector has returned to a yearly ritual that has been an integral part of Wall Street life: firing employees who are perceived to be underperformers. After Goldman Sachs fired hundreds of employees in September, the practice-which had been put on hold the previous few years due to a spike in transaction activity-returned.
Even if the layoffs are somewhat small, especially in comparison to far greater ones occurring at Internet companies like Meta and Stripe, they could only be the beginning of a trend if the capital markets stay stagnant.
As per SIFMA data, equity issuance fell 78% this year through October as the IPO market remained largely dormant. As the Federal Reserve raises interest rates, debt issuance has likewise decreased, falling 30% through September.
Due to pressure to restructure its underperforming investment bank, troubled Credit Suisse is facing the largest layoffs among Wall Street players. The company has announced that it will lay off 2,700 workers in the fourth quarter and hopes to eliminate 9,000 jobs altogether by 2025. However, even those working for Wall Street's top performers' companies that have recently surpassed European banks in market share aren't immune.
JPMorgan Chase would utilize selective end-of-year cutbacks, attrition, and reduced bonuses to reign down spending, putting underperformers at risk. Morgan Stanley is also considering job layoffs, though the extent of a potential decrease in personnel hasn't been determined. Lists of employees who would be let go have been drafted in Asian banking operations.
To be sure, management at Barclays, JPMorgan, and other institutions claim that despite the industry downturn, they are still hiring for in-demand positions and trying to upgrade positions.
Executives have been more pessimistic in recent weeks, predicting that revenue from robust activity in some sectors of the fixed-income world has likely peaked this year and that revenue from equities would continue to fall amid a bad market in stocks.
