I-banks tighten belts, freeze hiring

COST-CUTTING MEASURES, JOB SLASHES MAY BE IN THE OFFING DUE TO RECESSION IN THE UNITED STATES
Mahima Puri NEW DELHI
HIT by the US recession and slowdown in the global markets, financial institutions are treading carefully. While major investment banks are already cutting jobs in the West, the phenomenon is expected to catch up in the Indian market too. Banks are not only going slow on hiring, but are also likely to cut some flab in the coming months. Head-hunting firms indicate that financial institutions, including investment banks, are thinking about cutting costs in India. Though i-banks are still keeping their plans under wraps, sources said that major investment banks have either tightened their belts on hiring practices, or are gearing up to lay off employees. Korn/Ferry India’s senior client partner and managing director Deepak Gupta said: “Banks are moving forward cautiously and hence, some hiring decisions have been put on hold. We expect some more slowdown in the days to come. Some new banks that were thinking of starting operations in India have put some of these decisions on hold.” “India is not an insulated economy anymore. Ibanks are on the verge of cutting jobs. Though backend operations (call centres and BPOs) are still strong, the same cannot be said about front-end operations engaged in managerial jobs and investment banking. If things get worse in the coming months, the process shall accelerate further,” says Transearch managing partner Uday Chawla. A shift in the various lines of businesses can also be seen. “People are being asked to move from structured and mortgage analysis to more research-based work, or worse, to move on. While some hiring can be seen at the junior level, the senior level has definitely flattened out,” said another consultant on condition of anonymity. Though headhunters caution that the planned actions will be clear in the next three-six months, they add that the growth story for the Indian banking sector is far from over. It’s the American banks and their European counterparts that might suffer the most. “The aftermath of recession are turning out to be far more severe than most would have expected. Private equity firms and investment banks are now contemplating the possibility of shedding employees. Expansion plans are being delayed and hiring is being cut down to minimal levels,” says head-hunting firm Executive Access’ managing director Ronesh Puri. But the investment bankers say that all is well. “Hiring has not slowed down at Citi. We always ensure that we remain competitive in getting and keeping the right talent, at the right position,” said Citi India HR-head Ian Gore. Merrill Lynch, however, denied comment on the issue. “If there is a requirement of 10 people, only 5-6 are being recruited,” said founder director FiNoble Advisors Eshwara Venkatesam. FiNoble is an associate company of Europe’s Kaupthing Bank. WHAT LIES BENEATH • Back-end operations like call centres and BPOs may survive the times but front-end operations like managerial jobs and investment banking could suffer • Employees are being asked to move from structured and mortgage analysis to research-based work