The staff cuts come as each bank reported steep declines in investment-banking fees. Citi last month saw a 64% drop in that line item in its third-quarter earnings, compared with the same three-month period a year earlier. Barclays, for its part, saw a 45% dip in investment-banking fees year over year.
“Most of the banks are budgeting for declines in revenue next year,” a person involved with providing data and analytics to the industry told CNBC. “Investors know the general direction of the market — at least in the first half — and the thinking is that client demand for hedging has probably peaked.”
Citi and Barclays are hardly the only banks shedding staff. Morgan Stanley is considering eliminating roughly 50 investment-banking jobs in the Asia-Pacific region, Reuters reported last week.
Goldman Sachs, widely expected to cut hundreds of employees this year, presumably began its cull in September by eliminating 25 Asia-based positions.
It’s not uncommon for banks to jettison underperformers at this time of year, before handing out annual bonuses.
Citi CFO Mark Mason, for one, reiterated his bank’s commitment to investment banking during an earnings call last month. “We obviously will look at how the wallet continues to evolve and are very disciplined as it relates to expenses,” Mason said, according to Bloomberg, adding that Citi is “very focused on ensuring that we have productive talent in our business.”
While the bank is cutting jobs in investment banking, it’s doubling down overseas, adding 400 employees in its Belfast office, as it moves away from the London market in a cost-cutting measure. Citi also plans to add 300 roles in risk, audit, finance, technology and operations in Ireland this year, according to Bloomberg.
A spokesperson in the bank’s New York office declined to comment to the wire service on the reported upcoming cuts.
Barclays, meanwhile, is still hiring across the investment-banking division, with 365 open roles, a source told Bloomberg, adding that the bank remains committed to continuing to grow and invest in the business.