Global job cuts in the financial sector have reached India as well. Credit Suisse, the Zurich-based global financial services firm, has asked about a fifth of its wealth managers in India to leave the bank. According to sources familiar with the developments, 12 of the nearly 60 employees in wealth management operations were given the pink slip on Thursday morning.
Puneet Matta, head of the bank’s wealth management business in India, had also resigned, they said.
The move will see Credit Suisse joining the likes of Barclays Bank and Societe Generale, which announced lay-offs in some of its businesses in India. Credit Suisse had said in July it would cut 2,000 jobs globally by the end of 2012, following a dip in its earnings.
“This involves realigning resources and adjusting capacity to meet client needs and to manage costs across the business,” the official spokesperson of the bank said in an e-mailed response, confirming the development.
The Swiss bank declined to share the number of employees who would lose job, but said it would continue its wealth management operations in India.
“Credit Suisse remains fully committed to the Indian market. We continue to be proactive about monitoring the size of our business relative to efficiencies and market conditions,” it said in the mail.
Credit Suisse, which launched wealth management services in India in 2008, had earlier recruited a team of relationship managers, including DSP Merrill Lynch’s director and financial advisor Amit Khandelwal in June 2009.
Matta was not available for comments.
“In the wealth management space, the thumb rule is that an executive has to earn six times his salary. An executive is allowed to scale up to these levels in a year or two. In case, he fails to do so, he is asked to leave,” said a private wealth management firm head, adding every bank gave 12 or 24 months’ time, depending on its policy.
Last month, Barclays Bank decided to combine its client relationship teams at Barclays Corporate and Barclays Capital in India that led to around 25-30 people losing jobs. Karan Bhagat, country head and managing director of Barclays Corporate in India, was also removed from his position.
Societe Generale was believed to have closed its private banking business in India, sources said.
Broking houses are also downsizing their workforce in institutional businesses due to falling revenues amid weak investors’ sentiment towards share markets.
Alchemy Shares and Stock Brokers, co-founded by billionaire Rakesh Jhunjhunwala, closed its institutional business last quarter. Media reports said the brokerage had asked about 40 employees to leave. Mangal Keshav Securities, a Mumbai-based broking firm, has also closed down its institutional broking business.
Globally, banks and financial institutions are looking to reduce their headcount. The Hongkong and Shanghai Banking Corporation has decided to lay off 30,000 employees globally. The bank, however, said job cuts were unlikely in its India unit. On Friday, the Wall Street Journal reported Bank of America would shed 3,500 jobs this quarter and may ask another 10,000 to leave the bank if the restructuring continued.