It’s only happened twice since the peak, recorded nearly 6 years ago (at the end of Q3 2011): Alphacution’s bulge bank headcount index has recorded a rare uptick, as of the end of Q2 2017 (see Exhibit, below).
Now, of course, it may be too soon to sound the trumpets that a major turn has been made for headcount in the global banking sector. The moves – in either direction – are still small. Although, who knows? Maybe the expectation of regulatory rollbacks has got bank hiring managers feeling more exuberant of late. Or, maybe – as we suggested in our prior post – that process automation, particularly among quant shops, actually requires more people is something that applies more broadly in financial services (given the push to implement more AI).
One thing is for sure, most of our bulge banking tracking sample (7 of 9) is bigger in terms of headcount than they were more than 10 years ago. Only UBS and Citi are smaller, but that has been true since late 2009 (see Exhibit, below). Notably, Citi is now less than two-thirds the size as they were as of Q4-2006.
Also, of special note, Deutsche Bank (DB) continues to honor its early 2017 announcement to reduce headcount by 9,000 over the near term. In a related post, Alphacution laid out some predictions on how quickly such a reduction could be made based on the historical pace of hiring / firing at DB. We will be updating our thoughts on DB – including a more than 2-year assessment of their infrastructure deal with HPE – shortly.
In the meantime, please share your comments, questions – and ideas for new modeling output. We are always hungry to crunch that which our network needs…