Investment banks are sharpening the axe

busy” read a memo circulated to rookie investment bankers at Donaldson, Lufkin & Jenrette in the mid-1990s. “You are busy if you are working each weekday at least 16 hours and at least 16 hours on the weekend. These are working hours—not travelling, gabbing or eating time. If these are not your hours at the office, you have the capacity to take on more work.”Today’s bankers are more than willing to put in the hours—the problem is they lack the work to fill them. The fee bonanza caused by cheap money and giddy corporate bosses is long gone. Dealmaking revenues at the largest banks are down by almost half this year, and pipelines are nowhere near full. As revenues normalise, so do attitudes to hiring and firing. Last week Goldman Sachs, an American bank, began its annual cull of between 1% and 5% of staff, for the first time since 2019. An industry-wide hiring binge during the covid-19 pandemic means lay-offs will probably extend well beyond spring-cleaning. Wall Street’s human-resources departments will finally get to do the job they signed up for: sticking it to the salaried rich.