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I'm an investment banking cost cutter. Here's how to survive the chop

I cut costs in investment banks. This is my job. I am an expert in cutting costs and improving processes and creating efficiencies, especially in the technology function. If your job is going to disappear in the next 12 months, it will be someone like me that helps eliminate it.

So, what do I look for and how can you stay on my good side?

Firstly, I am the mistress of the hidden costs, the neglected costs, the little costs that might not seem like a lot but which add up. These are what I look for first - I don't want to cut your job if I can avoid it (especially if you're adding value), so I look for the things that aren't obvious. Everyone else goes for headcount and travel, but I always start out looking for things like money spent on subscriptions which aren't necessary, or software licenses which aren't really used. I implement a policy for managing the data relating to these small costs and analyze which aren't adding value.

Once the small but cumulative costs are gone, it's time to get serious. This is when I'm going to look at your job. In particular, I'm going to look at where your job is based and whether it's best done by a permanent member of staff or a contractor.

The contractor/permie debate is cyclical.  When the future is uncertain, banks will often look at using contractors for technology roles: they're more flexible and costs can be ramped up and down as necessary. When the future seems more certain, banks will risk bringing on permanent staff. Right now, there's a trend for banks (see Deutsche Bank, for example) to centralize technology functions and to operate them in the most efficient manner possible using permanent people. In the long run, this works out cheaper.

As costs are centralized I will look at who else is doing a job like yours in the organization. Do you both need to be doing the same thing? Who should be doing your job and where should they be sitting?

If your job is very routine and predictable, I will probably look at off-shoring it to Southeast Asia or Central Europe. If you work in data processing, or model validation and you haven't been moved offshore already, I'm afraid that it's probably going to happen soon.

If your job is more of a mid-level role which requires a bit of judgement, it probably won't be migrating far away. It will still be migrating, however: to somewhere out of London. If you're a business analyst, a project manager, or a developer working on a non-critical front office system, you can expect to go somewhere near-shore like Glasgow (J.P. Morgan and Morgan Stanley), Belfast (Citi), or Chester (Bank of America). Goldman Sachs is even outsourcing these kinds of roles to Warsaw.

How can you survive the arrival of someone like me? Flexibility is everything. You need to be prepared to move. I would also suggest that you need to be prepared to work from home.

If you're a junior working in a technology or an infrastructure role in a bank and you're sitting in London, you're at risk. You're not at risk because of your skill-set (or lack of it). You're not at risk because of your pay.  You're at risk because office space costs a packet in London and banks could replace you with someone working elsewhere far more cheaply. However, it's not always easy to find someone like you in near-shore locations, especially as your skills become more niche. For this reason, banks want to keep you, and they will want to keep you all the more if you're prepared to spend two more days each week working from home so as to cut down on the need for precious office space. I predict that this is going to become a big thing in the next few years.

This is the bottom line then. If you want to position yourself for continued employment and advancement and avoid my gaze, you need to be flexible. You need to be flexible about who you work for. You need to be flexible about where you live (both in terms of country and region). And you need to be flexible about where you work (in the office, from home, on the road, or in coffee shops). Do that, and you might survive. Good luck.



AUTHORSarah Butcher Global Editor
  • An
    21 July 2017

    I think that's the point. If you want to stay employed, be flexible. Whether you work for a big bank or for an agency that situates you in that same big bank or for a tiny hedge fund, the key to a successful career is to adapt to the changing environment.

  • Br
    Brad W
    15 July 2017

    There is a massive war for talent across the technology industry out there due in so small part to the pace at which the world is changing. The very best firms realize that the key to their very survival as industry after industry is disrupted by technology (Uber, Amazon, Netflix, etc..) is to assemble the best team of technologists possible.

    In the face of this existential threat that so many industries face, investment banks still seem to be responding by trying to save a few cents here and there on real estate and developer's salaries.

    The fact of the matter is that the huge banks are dinosaurs and, unfortunately for them, the meteor already hit in 2010. If I were a technologist at one of these places, I would worry far more about finding the next job right now than I would about convincing this woman I should keep the one I already had.

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