The Impact of Lowest Bonuses for a Decade on Bank Job Cuts

In light of a challenging period for merger and acquisition revenues and decreasing profitability within investment banks, several prominent financial institutions, such as Citi, Deutsche Bank, UBS, Rothschild, and Lazard, are implementing measures to reduce their workforce.

While there has been significant attention on Citi and Deutsche Bank, additional staff reductions are also now occurring at UBS, Rothschild, and Lazard. Nevertheless, all three banks have chosen not to provide any official statements on the matter.

The initial report of staff reductions at UBS was revealed by the Litquidity Instagram account, which disclosed that the cuts have particularly impacted equity directors and managing directors. The merger with Credit Suisse has been cited as a contributing factor to the downsizing. Additionally, insider sources at UBS have shared that recent departures from the bank include long-serving managing director and equities product manager, Richard Kersley, who had been with the firm for nearly four decades.

In the meantime, sources within Rothschild’s London office have revealed that the staff reductions have affected eight third-year analysts and first-year associates. These cuts come after a previous announcement of reductions at the managing director level in the bank’s New York office earlier this month.

At Lazard, the job cuts are reportedly part of the 10% reduction in staff that the bank announced in April 2023.

These staff reductions are taking place just before the anticipated announcement and distribution of bonuses at many financial institutions. According to headhunters, the disclosed bonus figures have been disappointing. A London-based merger and acquisition headhunter remarked, “They were down on last year, and last year was down considerably on the banner year of 2021, but this is more than a return to 2018 or 2019 – this is one of the worst years for bonuses for a decade.”

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The current situation within the banking sector serves as a stark reminder of the broader economic impact of low bonuses and declining revenues. It remains to be seen how these developments will continue to unfold and resonate throughout the industry.