With financial crisis worsening in the west, global financial firms have begun selective rationalization as a reaction to the market outlook. Post the Asian crisis of 1997, and the subprime crisis 2009, it is the third wave of financial market jobs being cut amidst the backdrop of the European financial crisis. So, be it Bank of America Merrill Lynch, Nomura, UBS, Credit Suisse, HSBC, Barclays or Daiwa Capital, all are planning to hand over pink slips to a number of their employees in India. The third quarter numbers to be announced in the next two weeks will be a trigger for yet another leg down for global banks and given the overcapacity in the investment banking industry, layoffs are inevitable.
Investment banking accounts for 90 percent of foreign banks revenue in India; but with funding drying up and number of deals plunging, the revenues have declined by 23 percent to $407 million. The appetite of overseas investors to purchase Indian equities has reduced drastically to $677 million and thus the securities business is not helping either. As the firms are not immune from the global woes, they have decided to do in India what they are doing in other parts of the world – layoff. In fact more than 200 people have been laid off in investment banking in the past few weeks in corporate banking and retail divisions as banks strive to sustain themselves amidst a general slowdown.