Thursday, 5 March 2009
Abruptly, expatriate bankers are cut loose
Also out of date: “FILTH,” which stood for “Failed in London, try Hongkong,” using an old British spelling for Hong Kong. A long list of U.S. and European investment banks have been trimming staff in Hong Kong as well, although not on the same scale as in Europe or the United States.
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Abruptly, expatriate bankers are cut loose
By Keith Bradsher and Julia Werdigier
5 March 2009
SINGAPORE: Bilingual in Chinese and English, with a master’s degree in private wealth management, Marco Wong jumped from a Singaporean bank to Citibank last October and was approached by recruiters from HSBC and Credit Suisse in November.
But Wong lost his job in mid-January as part of broader cutbacks, and he is still jobless now, despite his having peppered banks and recruiters with dozens of résumés.
“It was quite shocking,” said Wong, a Singaporean. “I didn’t think it was possible.”
As recently as last autumn, financial professionals who lost their jobs in the United States, where the credit crisis started, could hope for new positions overseas. But layoffs have spread quickly from New York to Europe and now to the Middle East and Asia, leaving unemployed bankers with few places to turn and a growing number of jobless expatriates either stranded or forced to move back home after losing their means of support.
Claes Smith-Solbakken, co-founder of Smith & Jessen, an executive search firm in Paris, said he had received more than 100 calls in the past two months from clients asking him to help them return home.
“There are armies of people who lost their jobs or don’t get bonuses anymore,” he said, “but they still have the same school fees and other costs to pay.”
Some expatriate bankers, seeing the writing on the wall, are turning their backs on the high-paying, high-pressure life.
When David Flynn moved to London from Australia four years ago, he loved being part of a bustling financial center with ample career opportunities and ever-rising bonuses. But as the recession started to bite last year, he said, the excitement ebbed, his work flow slowed and prospects dwindled.
Flynn, 28, an avid mountain biker, decided recently to leave his job at Union Bancaire Privée in London to move back to Perth, where he now advises individual clients on investments.
“‘London is a great place,” Flynn said, “but if you don’t have the money to enjoy all the things that are good, you struggle.”
For those trying to cling to their increasingly insecure perches, career counselors are generally telling bankers to use their contacts to look for jobs locally instead of sending résumés halfway around the world.
“Stay put,” said Paul Heng, managing director of Next Career Consulting Group Asia in Singapore. “I don’t think there is a refuge anywhere in this world.”
A rhyming refrain among laid-off bankers a few months ago - “Try Dubai, Mumbai and Shanghai” - now seems dated, as financial markets in all three cities have crashed.
Also out of date: “FILTH,” which stood for “Failed in London, try Hongkong,” using an old British spelling for Hong Kong. A long list of U.S. and European investment banks have been trimming staff in Hong Kong as well, although not on the same scale as in Europe or the United States.
About 325,000 financial services jobs have been cut worldwide since August 2007, according to the International Labor Organization, and many banks reduced their bonuses by as much as 80 percent or cut them completely.
While there are no specific figures on the number of expatriate bankers who have been laid off, the cuts have been widespread. Even in the oil-rich Middle East, where banks like Merrill Lynch and Citibank only recently were hiring dozens of investment bankers, expats are packing their bags as plunging oil prices put most deals on hold.
The last place to cut was Asia, where most economies remained strong until exports began to plunge late last year and investors’ confidence crumbled. Big Wall Street investment banks like Morgan Stanley, Goldman Sachs, Bank of America and others have each laid off more than 100 employees in Asia this winter.
More layoffs are likely. “When you need to reduce costs quickly, you just take out 10 percent and that’s it, boom,” said one investment bank official who insisted on anonymity because of the sensitivity of the subject.
Some residential landlords in Hong Kong have begun demanding three months’ deposit from bankers instead of the usual two, because of the risk that tenants may be laid off. Financial-sector recruiters have begun scheduling long vacations to use up annual leave as long as business is slow.
The growing number of highly paid expatriates losing their jobs is expected to affect international schools, particularly in Europe. Schools around the world are on average planning for a decline in enrollment of 5 to 10 percent for the coming academic year, according to International School Consultancy.
Asia has been affected least. The Hong Kong International School and the Singapore American School have each reported no increase in the number of students withdrawing over winter break. But neither has a sense yet of how many may withdraw over the summer.
In Asia, banks are transferring fewer employees elsewhere, and those losing their jobs seem to be staying put for now. James Thompson, chairman of Crown Worldwide Group, a large moving company based in Hong Kong that caters to expatriates, said there was no sign of an exodus from the city.
In London, however, an exodus is already under way. Sandra Johnson, president of the Kensington and Chelsea Women’s Club in London, which provides a social networking opportunity for Americans in London, said many families were leaving and fewer arriving. Membership of the club has dropped 10 percent to 1,100 from two years ago.
“It’s really difficult,” said Johnson, who moved to London with her family from Westchester County, New York, more than four years ago. “Some people just try to make it until the end of the year.”
Others are not even waiting that long. “When I was fired,” said one banker from Austria who was working in London until November, “I started to pack.”
“I’m sorry I had to leave London, but it’s just too expensive,” he added. “For the £530 a week I paid for 60 square meters in London, I could get a villa here.” (The equivalent is $750 a week for 650 square feet.)
Heng, the career consultant, said he was encouraging some highflyers to consider new careers. He cited a chief information officer of a technology company who just found a job he loves as a high school teacher. The pay is a lot lower, he said, but the job security is hard to beat.
An Australian investment banker named Christopher lost his job in November and moved back to Adelaide to raise horses with his wife and two children, having concluded that it would be too expensive to stay in Singapore. Combined school fees in Singapore were more than $25,000 a year and rent was $64,000 a year; corporate subsidies for both disappeared with the job.
“There was no sense burning through an absolute fortune,” said the former banker, who insisted that his last name not be used, “for something that might not happen.”
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