S'pore finance sector braces for wave of layoffs
Many bank execs will be hit, not just clerical staff
By
Ling Su Ann
(SINGAPORE) Singapore's financial sector is bracing for possibly the worst layoffs it has seen. Aside from some 3,000 job losses from local bank mergers, hundreds more are likely to be cut by foreign banks based here.
What's different this time is that many bank executives will be hit, not just clerical staff. And many may not get their jobs back even when the economy recovers, as the job losses may be permanent.
Unlike in manufacturing, which has already seen massive layoffs, the financial sector shake-up is just starting.
According to latest labour statistics, the financial industry saw 222 retrenchments in the first quarter, against 687 retrenchments all of last year. But that's before the consolidation really got going.
Most of the bad news so far has come from foreign banks rationalising their global operations. US investment bank JP Morgan Chase, which merged eight months ago, has reduced its Singapore-based staff by about 20 per cent to just under 1,000. Senior country officer Jeanette Wong recently said more jobs may be cut as the bank completes its back-office integration.
Layoffs are in the works at Bank of China which has merged with Kwangtung Provincial Bank.
Another wave of retrenchments is expected from the Japanese bank mega-mergers. Most of them still have separate offices here although mergers may have already taken place in Japan.
A Japanese banker here said it would be difficult to estimate the job cuts in Singapore because the head offices are still consulting the Ministry of Finance in Tokyo on which businesses they should keep and which to wind up. Even so, most have announced global plans to axe staff.
Japanese banks Sanwa, Tokai and Toyo Trust & Banking - which merged to form United Financial of Japan Holdings (UFJ) in January - will consolidate their Singapore operations in January. UFJ recently said it would axe a further 1,200 employees by March 2007, in addition to the 6,900 job cuts outlined in a previous plan, and shut 16 overseas branches.
In Singapore, Toyo Trust has quietly shut its small representative office, while Sanwa Bank said in July it will wind up its futures operation, which employs about 15 futures brokers.
Sumitomo Bank and Sakura Bank, which merged in April to form Sumitomo Mitsui Banking Corporation (SMBC), laid off 17 of its 230 Singapore staff in July. The rest, one of them told BT yesterday, have been assured of no more retrenchments 'in the foreseeable future'.
Mizuho Holdings - the world's largest financial group formed by the merger of Fuji Bank, Dai-Ichi Kangyo Bank and Industrial Bank of Japan - said it will slash 7,400 jobs by March 2006 and close 58 offshore branches by March 2003. The banks have yet to consolidate their Singapore-based operations.
Even those not swept by the consolidation wave have announced layoffs as part of cost-cutting efforts. Credit Suisse First Boston recently retrenched 18 investment bankers in Singapore and Hong Kong. Headhunters say the cuts in investment banking divisions are in line with the regional slowdown. One of them said: 'There aren't many deals in South-east Asia at the moment so the banks are taking this opportunity to cut staff and reposition their resources.'
They say it's difficult to project the number of cuts by foreign banks as most layoffs are part of a global plan to reduce costs and are not driven by local considerations.
'This time, wholesale divisions are being closed down and the cuts have been rather indiscriminate,' said Rosemary Chisholm, managing director of executive search firm Kapient.
But all is not doom and gloom. Goldman Sachs spokesman Peter Rose said that although Asean economies have not provided many opportunities in the past year, Goldman has not, and will not, be cutting staff.
The bank, which employs about 200 staff in its Singapore headquarters, sees long-term opportunities here. These include the government's plan to pare its stakes in large corporations, and the desire of local companies to spread their wings globally.
Headhunters also said that while jobs are being lost, new positions are being created. 'Although hiring budgets have been cut and retrenchments are rising, there is strategic hiring going on,' said Kapient's Ms Chisholm. She cited three areas: technology, customer relationship management, and change management.
