Morgan Stanley’s reminder of how banking careers die

Banking is an industry known for its cyclicality. In human terms, this means that it’s known for hiring people when the future looks promising and then firing them again when it doesn’t. Theoretically, losing a job at the bottom of the cycle shouldn’t preclude you from finding a new one at the top, except it doesn’t quite work out like that. 

Morgan Stanley’s fixed income division is a case in point. Back in 2015, Morgan Stanley decided to dispense with 25% of the headcount in its fixed income currencies and commodities (FICC) division, amounting to around 1,200 people, including several it had only recently hired. Now, however, the bank has told the Financial Times it spent the past few years rebuilding its fixed income headcount back up again and that this was one reason why it achieved record fixed income trading revenues of $3bn in the second quarter of 2020.

So far, so cyclical – except Morgan Stanley’s fixed income business hasn’t entirely gone full circle, but stopped part way. Ted Pick, head of Morgan Stanley’s investment bank, told the Financial Times that Morgan Stanley let go of 1,200 people in 2015 but has only added 600 since: it’s still down by 600 people net.

This, then, is the unfortunate reality of the banking front office jobs cycle: jobs cut in the downturns usually exceed jobs added in the upturns, such that front office headcount over time is on an ineluctable downwards trajectory. Hence, the most recent peak for all securities jobs in New York City, of 182,100 in 2019, was below the most recent peak of 188,900 in 2007, which was also below the peak before that of 201,100 in 2000. It’s a wild ride, and with every bottoming-out, jobs disappear which are never added back.

Sarah Butcher  –


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