City hiring drops by a third as banks brace for slowdown

Hiring in the City of London has fallen by almost a third as the economic turmoil spells the end of a deal boom for banks and financial services firms, a leading recruiter has warned.

Morgan McKinley, which specializes in hiring for financial services roles, found that the number of job vacancies in the city in the third quarter fell 31% to 7,907 from the previous three months.

It came even as the number of high-skilled workers out of work but seeking finance jobs jumped to 27,097, the highest level since 2017 and a 14% jump from the previous year. last year.

Hakan Enver, Managing Director of Morgan McKinley, said: “It has been over a year since the economy fully reopened. We’ve had a steady period of recruiting activity for most of that time, but now it looks like hiring in the city’s financial services sector has slowed down a bit.

After a string of windfall profits for banks during the pandemic, “employers woke up in 2022 with a lot of fat to cut across all seniority levels,” said consultant Loula Lefkaritis, who oversees financial services recruitment. at headhunter Egon Zehnder.

She added: “Clearly, because the IPO market is dead this year – the market crash has sent valuations plummeting – equity markets teams will certainly be among the hardest hit. The banks have already reduced and repositioned these teams throughout the year.

“As far as the M&A product goes, it holds up, relatively speaking. If you talk to some individual bankers, you’ll see they’re still busy and their pipelines are decent considering the dire state of the economy. The problem is how this translates into fees, as they are under tremendous pressure from customers. »

Some banks have already started cutting spending.

The Financial Times reported last month that Goldman Sachs was seeking to cut up to 5% of its global workforce, after revenue fell 38% year-on-year in investment banking and 83% in asset management. ‘assets.

Meanwhile, Berenberg said he would cut 5% of his 500-strong workforce in London, citing ‘the quietest year [for equity issuance] since 2003 “.

Simon Humphreys, associate director at recruitment agency Randstad, said: “Our financial services clients are still recruiting, but not quite at the same volume as in the first half of the year.”

This had a knock-on effect on wage growth, Humphreys added.

He said: “For the most part we don’t see big pay rises on offer so we have to manage expectations more.”

Earlier this summer law firm Allen & Overy froze the salaries of junior barristers at £107,500, after raising salaries twice in the past year to avoid being overtaken in a war of talents with higher paying American companies.

In an email seen by RollonFriday, a legal news website, Allen & Overy told the partners that “after careful consideration of the market and economic conditions have become more difficult”, the firm has “decided not to not increase associates’ one-time salaries”.

The Magic Circle company has also canceled the salary review for senior associates.

Other recruitment agencies have also warned of a drop in hiring for new positions as the previously tight job market begins to ease.

PageGroup Global issued a trade update on Wednesday warning that it had seen employers withdraw job postings towards the end of September.

“We have seen a slight weakening in customer confidence across the majority of our regions,” PageGroup chief executive Steve Ingham said in a statement.

He added: “This resulted in the loss of a small number of jobs and a slowdown in the time to hire in a number of our markets towards the end of the quarter.”

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