It’s a bloodbath out there. There is no question about it. Revenues at investment banks are down 50%+ year over year as rising interest rates and slowing economic conditions have put a complete pause on most M&A activity around the world.

It’s crazy how an industry can go from having an insanely good record year like in 2021 to layoffs just one year later. Investment banks were hiring like crazy all throughout 2021 to try to keep up with demand. Then just one year later in 2022/2023, banks have way too many employees and not enough deal flow.

It’s been a while since the last time we had so many layoffs in investment banking. Following COVID, most of the banks paused any sort of layoffs. Typically, firms like Goldman prune their workforce slightly at the end of each year, getting rid of the low performers. But aside from that, there hasn’t been this level of mass layoffs since 2009.

The below was compiled through various sources and news article. There may be some discrepancies and not factual information, so comment below if there is anything that is not true.

Bulge Bracket Investment Banking Firms

Goldman Sachs

• 3,200 jobs across the bank, 6.5% of workforce
• GS typically prunes the bottom <5% of performers ever year

Morgan Stanley

• 1,800 jobs across the bank in December 2022 (2% of workforce) and 3,000 jobs by the end of June 2023
• CEO said: “We’re making some modest cuts all over the globe. In most businesses, that’s what you do after many years of growth”

JP Morgan

• None thus far. JPM is one of the strongest, most well- regarded banks from a financial perspective and is investing heavily across most of its businesses
• CEO said: “So far we are in hiring mode… We have a lot of growth plans”
• That said, some bottom tier performers seem to be getting close to no bonus (signaling probably best to find another job)

Bank of America

• Small amount of layoffs, reports saying ~200 employees affected globally within investment banking
• Hearing that senior members have told junior employees they are safe and a bit of house cleaning probably needs to be done at the senior level (3^rd year VP and above)

Citi

• Reports in 2022 mention hundreds of layoffs within investment banking
• Announced 1,600 layoffs in 2Q23 within the trading and investment banking divisions – Overall cuts of less than 1% of its 240,000 workforce across the firm
• In September 2023, announced more layoffs (# undisclosed) due to a corporate restructuring

Barclays

• 3% layoffs within the ivnestment banking division globally in November 2020
• Another round of layoffs in April 2023 of ~100 employees

Wells Fargo

• None thus far in investment banking, layoffs mainly concentrated in mortgage banking

Deutsche Bank

• Small handful of layoffs back in October 2022 concentrated in NYC

Credit Suisse

• Pre-merger with UBS, 9,000 job cuts were announced across the bank, 17% of workforce
• Post-merger, it was rumored in August 2023 that UBS was cutting a couple hundred investment bankers from Credit Suisse within investment banking/capital markets
• Out of all the investment banks listed here, Credit Suisse is one of the most troubled financially and is going through a big turnaround

UBS

• Bank CEO originally said it is “bucking the trend” and doesn’t plan to make large-scale layoffs
• Following the merger with Credit Suisse, UBS announced massive layoffs of up to 30% of the workforce, as many as 36K jobs worldwide

Regional Investment Banks

Truist

• 5% layoffs reported in investment banking early 2023 – All analysts to keep their jobs at least through June; some junior members offered to relocate to Atlanta
• “Significant” upcoming job cuts announced in September 2023

RBC

• Laid off 1% of investment banking jobs in September 2022
• Second round of layoffs in April 2023 of “more than a dozen jobs” in the US

“Elite” Boutique Investment Banking Firms

Lazard

• 10% workforce reduction announced in April 2023 across the firm, ~300+ employees

Evercore

• None thus far, aside from underperformers being pushed out (typical for Associates in investment banks after a couple years)

Moelis

• None thus far
• Bank has been aggressive on the hiring front and CEO has told everyone that it plans to continue to hire over the course of the year

Centerview

• None thus far. Private company so likely feel less pressure to reduce expenses and can invest in talent over the long-run.

Other/Middle Market Investment Banking Firms

Jefferies

• 5% of workforce laid off in 2022
• Multiple reports of associates and a few analysts getting zero bonus and let go in 2022

Houlihan Lokey

• None thus far
• CEO mentioned: “Absolutely no reductions… We are not looking to pull back”

Tech Company Layoffs Will Be Worse Than Finance Layoffs

If you just look at any of the big tech companies, Google, Microsoft, Facebook etc., you will see that headcount at each of those firms is substantially higher today than where it was just a few years ago.

• Google – 119,000 employees in 2019 vs. 140,000 today (post the 12K layoffs that happened in January 2023)
• Microsoft – 144,000 employees in 2019 vs. 220,000 today
• Facebook – 45,000 employees in 2019 vs. 66,000 today (post the 11K layoffs that happened in November 2022 and 10K that happened in March 2023)

As you can see, headcount at all of these large tech firms is still substantially higher than it was pre-COVID. Even though both Google and Facebook laid off a ton of their workforce already, they have a headcount that is dramatically above were it used to be just recently. If the economic picture gets worse from here, we could see multiple large rounds of layoffs coming down the pipe in the next year or two. These firms just can’t layoff a 20K+ employees all at once due to political reasons.

Banks don’t really have this problem. Even though they did increase hiring in 2021, they didn’t hire at the magnitude that tech companies have. Plus, most of these investment banks, at least the bulge bracket firms, have multiple lines of business that are doing pretty well right now which will cushion any further economic pressures.

How to Prevent Being Laid Off in Investment Banking?

Sometimes it is completely out of your control that you were laid off. Just like a lot of industries, investment banking is cyclical, some firms outperform, some underperform, and most firms over hire during boom times and need to cut down when things slow down.

That said, you never want to be in the position where you are the first to be on the chopping block when the macro gets tough. It’s so easy to outperform others in your Analyst or Associate class and get to the point where you can minimize your chances of being laid off.

After being an investment banking analyst for a few years, I’ve learned there are certain things you should and should not do to stand apart from the crowd. See below for a list of all the tips and everything you need to know to outperform and be a top ranked investment banking analyst.

• 10 Steps to Being a Top Bucket Ranked Banking Analyst
• Top 10 Investment Banking Analyst Tips

Laid Off? How to Survive

I know how hard it feels like to one day feel like you are on top of the world with one of the best jobs you can get in the industry to unemployed quickly. I’ve gone through many ups and downs in my career – started my career at one of those “elite” investment banking shops, then moved to a large multi-manager hedge fund, then to a startup fund that blew up after just a few months, to unemployed.

Went from feeling on top of the world at a large hedge fund to nothing. Was very close to giving up and leaving finance, but thankfully I didn’t, learned to deal with failure at work, and ended up transitioning to a long-term value-oriented investment shop that has worked out better than I could have even imagined.

There are a few steps you need to take if you suddenly become unemployed. You can read it here on What To Do If You Are Unemployed. Just realize that success doesn’t happen in a straight line and think of your situation, whatever it may be, to be just a part of the process.

What To Do Next After Investment Banking

The good thing about working in investment banking is that it provides so many different exit opportunities. There are many paths you can take If you were laid off suddenly. Can read about them here on the 7 Best Investment Banking Exit Opportunities.

If there in an industry or a role that you want to break into, you need to figure out how to get that job you love. You learn overtime that something that may seem impossible initially wasn’t actually that hard to break into. I thought it was impossible for someone who had no investing knowledge or experience to break into a hedge fund.

But after working for a while now, I learned that if there is something that you really want, then you just need to create a plan and be persistent. One day you’ll get “lucky” and get what you’ve always wanted.