Investment Banking Industry

Publication: unknown
Article Date: January 17, 2014

”After peaking at the end of 2010, employment in the investment banking industry has been declining steadily. The number of bankers at the 10 largest firms will fall by at least 3,000 in 2014 , leaving the total 20% below its peak. Pay is dropping and pay cuts are accelerating. The investment banking industry is facing a structural downturn. The industry’s revenues and profitability have fallen far more sharply than pay and employment. There are difficulties making cuts at the banks without shutting down whole departments. Simply thinning the numbers of traders and bankers often results in revenues falling faster than costs. Instead of firing employees that are not easily replaced, new employment arrangements can be developed that reduce costs but retain talent. UBS has decided to get out of debt trading and is trimming about 10,000 jobs. It will not only incur the cost of multiple severance packages but if the decision is made to re-enter the industry replacement talent may be unavailable. Employment lawyers traditionally advise corporate employers on severance packages but now have to consider legal options for new employment arrangements that cut costs without terminating talent.”

So says Brian Grosman of Grosman Law Group, Employment and Labour Lawyers in Toronto and across Canada.

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