Market volatility to continue, we remain underweight equities: BMO's Adatia
Bank of Montreal’s capital-markets division is cutting jobs across its businesses and locations in response to weakening market conditions, according to people familiar with the matter.
The cuts account for a small percentage of the firm’s personnel, said one of the people, who didn’t provide a specific figure.
BMO Capital Markets is managing its resources “dynamically,” which “means making difficult choices to optimize its workforce,” spokeswoman Kelly Hechler said in response to a Bloomberg News query. Hechler declined to comment on job losses or individual departures.
Banks are cutting staff amid a drop in debt and equity issuances, along with weakness in some areas of the trading business. Goldman Sachs Group Inc. plans to eliminate several hundred roles starting this month, marking its biggest round of cuts since the start of the coronavirus pandemic.
Bank of Montreal, Canada’s fourth-largest lender, said capital markets revenue fell 20 per cent from a year earlier in its most recent quarter, and the bank booked a $37 million (US$28 million) severance charge for the business related to the cuts.
Canada’s six largest banks have bulked up in the last few years and may cut jobs, including in investment banking, which accounts for a large portion of their compensation expenses, said Adam Dean, president and founding partner of Dean Executive Search.
“Some of those businesses, including investment banking and M&A, are likely to be operating in a less-frothy environment going forward,” Dean said. “Layer in the fact that, as public companies, our banks have to answer to analysts, and that means that we can expect them to manage earnings, so cuts could be in the offing.”
The situation is a stark reversal from less than a year ago, when the job market for capital-markets talent was booming, and the banks increased bonuses by the most in at least nine years.
“We have heard from various senior investment-banking leaders that they are concerned about activity levels going forward,” Dean said. “As such, they’re less confident about making major hiring decisions than they were just six or 12 months ago, especially when it comes to committing to candidates with high compensation expectations.”
Technology banker Jason Hutchinson is among those who have left BMO, according to people familiar with the matter who, like the others, asked not to be identified because the information is private. Hutchinson was co-head of global technology and business services investment banking, according to the bank’s website.
Hutchinson had been at BMO since August 2021 and worked in the San Francisco area, according to his LinkedIn profile. Before joining BMO, he was a managing director of telecommunications, media and technology banking at Lazard Ltd. and global head of tech investment banking at Houlihan Lokey Inc.
Hutchinson couldn’t be reached for comment.