Top earners first to face axe
By David Uren
Job losses are mounting in the financial services sector as both the major banks and the investment banks confront continuing global turbulence. However, the axe is swinging selectively, with the top salary earners in the investment banks and backroom staff in the major banks suffering most of the job losses. Recruitment consultants say the drive to cut costs is resulting in forced redundancies in both the investment banks and the big four banks. Westpac and the ANZ have announced large job cuts in the past week, while Macquarie Bank has joined other investment banks, including RBS and UBS, in cutting some of their operations. Financial services director with recruitment firm Michael Page, Sharmini Thomas, said the squeeze in the investment banks was focused on top-earning staff. With fewer deals being generated and the volume of trade falling, there was less demand for the sales force and the trading staff. “These people typically earn the highest amounts, and share in the great times with huge bonus components in the good times, and ride the risk curve when things turn down.” She said that in positions paying up to about $150,000, the market was ticking on as usual. “If a role is deemed critical — a tax or financial controller role — they will be replaced without question. North of $150,000, there is a lot more scrutiny on how many are required,” said Ms Thomas. She said the attrition at levels above $250,000 was largely involuntary, with forced redundancies. Within the major local banks, the focus is on lowering overheads by cutting staff in marketing, finance, information technology and human resource support functions. “They don’t want to cut anything that engages with a customer, so they’re not touching tellers or financial planners. The head of financial services with recruitment firm Robert Walters, Andrew Hanson, said the big four banks were focusing on internal recruitment. “There is definitely still recruitment at the junior to mid-levels. However, I wouldn’t say that it’s business as usual.” He said banks were seeking to shift backroom operations to lower-cost jurisdictions offshore.