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Junior banker job cuts have slowed over working hours concerns

This time last year, banks were cutting many of the juniors they hired during the frenzy of 2021 and 2022. Not long ago, they were cutting them still. But after renewed concerns about junior bankers' working hours, there's hesitation about deeper cuts, and even a glimmer of hiring.

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"The RIFs [reduction in force] chatter has all but slowed on the work-life balance issues," says Meridith Fiedler Dennes at recruitment firm Prospect Rock Partners in the US. At the same time, Fiedler Dennes says junior banker hiring is "definitely picking up," although it may slow again this summer.

Concerns about junior bankers' working hours have resurfaced following the death of Leo Lukenas, an associate at Bank of America. Although Lukenas died of natural causes following an "acute coronary artery thrombus," there were initial suggestions that he'd worked 120 hours a week. These were later refuted by Bank of America, but a recruiter told Business Insider that Lukenas had approached him looking for a new job because his hours were excessive. 

Lukenas' death caused a storm on social media, with junior bankers threatening to go on strike. As sensitivity to working conditions increases, rival banks, including Rothschild, have been berated for overworking juniors too.

When Moritz Erhardt, a Bank of America intern, died after allegedly working long hours in 2014, banks scrambled to add controls to interns' schedules. And when Goldman Sachs analysts complained of excessive working hours at the start of the pandemic, banks scrambled to add headcount and dissipate the workload. Now that working hours are on the agenda again, it's inevitable that banks will be sensitive to the strain on existing employees. 

That sensibility could benefit this year's summer interns, who are arriving soon and might experience higher conversion rates as banks look to add cheap talent. In the US, Fiedler Dennes says there's already demand for "seasoned associates" and "junior VPs" to help train the incoming classes of interns and graduates. 

In London, M&A recruiters say hiring is still slow. There's "a little" junior hiring, says Barney Mundell at search firm Loxley Partners, but it's only in pockets. It's "picked up somewhat" but not much, says Lazo Cetnik at Pretraga Partners.

Banks like Goldman Sachs and Deutsche Bank registered year-on-year increases in M&A revenues of 24% and 13% respectively in the first quarter of 2024, while rivals like JPMorgan and Citi experienced declines of 21% and 17%. Tom Ragland, a recruiter at Harrison Rush Group in the US, says overall M&A hiring is down this year compared to 2023 as opportunistic hires made by banks like Santander in response to the demise of Credit Suisse wane. "M&A is improving but recruiting is not," Ragland says. 

Nonetheless, there are some signs of activity. Evercore in particular has made multiple associate and VP hires in recent months, alongside senior additions like Jeff Haller, a Goldman Sachs MD working with asset management firms. Moelis & Co. recently hired William Stuge from Rothschild as a VP to work on London fintech deals, along with Laurence Easton-Jones from HSBC for financial sponsors deals. Greenhill hired Guillem Torner from RBC as an associate for its healthcare team.  

If junior banker recruitment really picks up, however, Cetnik says the resurgence is likely after the summer lull: "Most of our clients had a solid Q1, but they want a solid Q2 before committing to serious hiring." Mundell says the signs are positive - as deals return, he says banks are "reaching capacity" and can't demand their existing juniors work extra hours; they therefore need to hire. 

In London, at least, though, there are signs that recruitment might not return to pandemic highs. Brexit means banks are increasingly locating juniors in European financial centres instead of the City. Goldman Sachs, for example, has advertised vacancies for seven Europe-based analysts currently; only one is in London, the other six are in Frankfurt, Munich, Milan, Madrid and Stockholm.

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Photo by Nick Abrams on Unsplash

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AUTHORSarah Butcher Global Editor

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