Slash, Cut and Fire – Nomura, BOA, Deutsche Bank go on a Pink Slip Spree

Investment Banking Jobs are becoming scarcer and scarcer as the industry continues to retrench since banking fees collapse. A Tepid Global Economy and stricter financial regulations have meant that the I-Banks can no longer support the bloated expensive workforce that had kept growing during the boom years. Despite repeated QE by Bernake, the economy globally remains in a coma living through endless QE by central banks. Europe is in a recession and China has been slowing down since last year. Emerging economics like India and Brazil have also seen sharply lower growth while USA can’t grow more than 2% despite massive fiscal and monetary stimulus.

Investment Banking which recovered in 2009 after a massive dose of stimulus, is facing the harsh return to the mean reality. Bank of America which went on a buying binge is now being forced to reduce as its revenues have collapsed. Nomura, the Japanese Bank which had visions of becoming a global bulge bracket bank has been rocked by scandals and losses. It is cutting investment banking jobs in the Middle East as delusions of grandeur face red ink. Deutsche Bank which had announced job cuts only outside Germany is rumored to be cutting jobs in its home market as well.

WSJ

Bank of America Corp. is accelerating a broad cost-cutting plan and has set a target of shedding 16,000 jobs by year’s end—cuts that would see the company relinquish its title as U.S. banking’s largest employer.

The reductions for the final six months of the year, outlined in a document given to top management, are part of a larger effort to retool Bank of America into a leaner and more focused enterprise.

ET

Nomura Holdings, the Japanese bank aiming to slash $1 billion in costs, is to cut a “handful” of investment banking jobs in Dubai, two sources familiar with the matter said.

The rationalisation measures by Japan’s largest investment bank, which unveiled its second major restructuring of its loss-making overseas operations last month, follows Deutsche Bank’s plans to slash its investment banking workforce in Dubai.

The job cuts in Dubai are confined to the investment banking team, while the capital markets business is not undergoing any reductions, one of the sources said.

Bloomberg News had reported that Nomura is cutting a third of its investment banking team of 12 and eliminating Scott Ferguson, head of its investment banking business for Middle East and North Africa region.

ET

Thousands of jobs may go at Deutsche Bank AG in Germany, with a first round of losses at its base in Frankfurt and its Postbank unit in Bonn, a German newspaper reported on Friday.

Back-office services from its retail banking brands that are currently carried out by a variety of subsidiaries will in future be done by workers at one new unit under a new structure, and all IT systems will be transferred to one platform, potentially eliminating thousands of jobs, Sueddeutsche Zeitung reported.

In a first wave, 543 jobs will be scrapped in Bonn and Frankfurt, the paper said, citing an internal document, with cuts in the finance, risk, controlling, treasury, HR, economic analysis and legal departments. Around 80 percent of the 543 jobs cut will be in Bonn, the paper added.

Deutsche had announced 1,900 job cuts in July, but said they would come mostly outside of Germany. Wind turbine maker Suzlon Energy has sought a four-month extension from bond holders for redeeming Foreign Currency Convertible Bonds (FCCBs) worth over USD 220 million that are due next month.