Goldman Sachs Group Inc. (GS) led foreign banks in accelerating job cuts at their Japanese brokerages last fiscal year as employees relocated to other Asian financial centers and firms trimmed costs amid a global industry slump.
The number of staff at nine global securities firms in Japan fell by 537, or 7.3 percent, to a combined 6,796 as of March 31, more than double the previous year’s 3.2 percent reduction, according to company regulatory filings.
Wall Street and European banks have been eliminating jobs and transferring staff from Japan to Hong Kong and Singapore to reduce expenses as the euro region’s debt woes dent global investor confidence. The worst may be over as Japan recovers from last year’s nuclear crisis and some U.S. firms start hiring junior bankers for mergers advice and asset management, said Katsunobu Komizo, a Tokyo-based recruiting consultant.
“Overseas banks made deep cuts from October to March due to the Fukushima and European shocks, especially in investment banking such as equity underwriting,” said Komizo, president of Executive Search Partners Co. “But we’ve past the peak.”
Stock underwriting in Japan suffered last year as companies shunned capital markets after the March 2011 earthquake and tsunami that left 19,000 people dead or missing and caused a meltdown at the Fukushima Dai-Ichi nuclear plant north of Tokyo. Public offerings fell to 1.2 trillion yen ($15 billion) in the year ended March from 4 trillion yen a year earlier, according to data compiled by Bloomberg.
Tokyo is the world’s most expensive city for expatriates, according to ECA International’s Worldwide Cost of Living Survey conducted in March. Singapore is 32nd and Hong Kong 36th. The yen touched a postwar high of 75.35 against the dollar in October, raising costs for overseas banks and their foreign staff. Japan’s currency traded at 78.43 at 5:45 p.m. local time.
Goldman Sachs Japan Co. reduced headcount by 14 percent to 847, the biggest cut among the brokerages, according to the firm’s filing e-mailed to Bloomberg News. The New York-based company has other operations in Japan, including asset management.
Hiroko Matsumoto, a spokeswoman for Goldman Sachs in Tokyo, declined to comment. Tokyo-based spokesmen for the eight other brokerages also declined to comment.
Credit Suisse Group AG (CSGN), Switzerland’s second-biggest lender, pared the workforce at its Japanese brokerage by 8.6 percent to 540. Deutsche Bank AG (DBK) reduced 7.9 percent of staff at its local securities unit to 834 and BNP Paribas SA (BNP), France’s largest bank, cut 7.4 percent to 462.
Barclays Plc, Citigroup Inc. (C), Morgan Stanley (MS), Bank of America Corp. (BAC) and JPMorgan Chase & Co. (JPM) also trimmed jobs at their securities units in Japan, according to the filings to the Financial Services Agency. Bank of America employed 1,028 staff at its Japan brokerage as of March 31, the most of the nine firms.
The brokerages posted combined profits in Japan of 2.9 billion yen for the fiscal year, recovering from losses of 118.6 billion yen a year earlier, the filings showed. Morgan Stanley’s local joint venture with Mitsubishi UFJ Financial Group Inc. led the gains with net income of 34.6 billion yen.
Barclays (BARC), the U.K.’s second-largest bank, posted net income of 5.5 billion yen in Japan, the second highest among the nine brokerages and up from 56 million yen a year earlier. Profit at Goldman Sachs Japan fell to 4.7 billion yen from 18.1 billion yen.
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