Investment bankers lose jobs as Asian deals slow

Hong Kong — Morgan Stanley and HSBC are cutting dozens of investment banking jobs in the Asia Pacific this week, sources with knowledge of the matter say, as weaker deal activities and sluggish markets in China and Hong Kong weigh on their business prospects.

Morgan Stanley was cutting at least 50 investment banking jobs in the region starting this week, three sources with knowledge of the matter said, affecting about 13% of the Wall Street bank’s Asian investment banking workforce of 400.

Layoffs at the investment banking business unit of HSBC, which makes the bulk of its revenues and profits in Asia, started on Tuesday. The process was expected to see the departure of about 30 dealmakers in the region this week, three separate sources said.

All of the sources declined to be named as they were not authorised to speak to the media. Morgan Stanley declined to comment on the job cuts. HSBC did not immediately respond to a query on Wednesday.

The cuts follow similar measures by other banks stung by a decline in dealmaking activities in China amid a slowing economy.

Staff cuts that began in late 2023 on the Chinese mainland and Hong Kong, key regional investment banking hubs of Western banks, were set to gather pace this year, bankers and recruiters have said.

The top listing destinations for Chinese companies are facing a drought in dealmaking and shrinking valuations. Hong Kong’s stock exchange saw 12 initial public offerings (IPOs) raise HK$4.7bn ($600m) in the first quarter, a drop of 30% year on year and the worst since 2009, according to data from Deloitte.

Money raised via Chinese IPOs plunged 82% from a year earlier to just $2.4bn during the same period, the smallest quarterly fundraising since the fourth quarter of 2018, preliminary LSEG data showed.

The total value of merger & acquisitions with Chinese involvement shrank by 36%, according to LSEG data, pointing to smaller fees bankers earned from clients.

In January, Bank of America laid off about 20 bankers in the region, after a flurry of investment bank downsizing by UBS, Citigroup and other boutique firms.

Reuters