Is that right? Is hiring now all but done at US investment banks until budgets are reset in January 2023?

Clearly not. Even as the chatter about the job cuts intensifies, new recruits are arriving and new jobs are being released. JPMorgan alone launched 2,167 new jobs in the past week, including openings in quantitative research, machine learning and equity research. Goldman Sachs has released nearly 40 jobs since Monday; Bank of America released eight smaller roles in its corporate and investment banking over the same period.

Say what you want, this is not a hiring freeze.

Hiring slows, but it’s a long game

It’s a slowdown in hiring. Speaking yesterday, Goldman Sachs chief financial officer Denis Coleman said Goldman would slow the “hiring velocity” and there would be “a decrease in attrition replacement”. In non-Goldman parlance, that means there won’t be as many hires, and when people leave, they won’t be replaced.

BlackRock, an asset manager rather than a bank, also made bearish statements about its hiring intentions. “We are deferring some senior executive hires to next year,” Chief Financial Officer Gary Shedlin said. “Market headwinds” are to blame.

As hiring slows, however, companies with strategic plans remain committed to those plans.

Bank of America, for example, does not seem to regret hiring 60 people in EMEA bond trading this year. He said yesterday that he had been “rewarded” for it in the second quarter as fixed income sales and trading revenue rose (although they rose less than at some rivals).

Similarly, Citi CEO Jane Fraser has indicated no intention of backing down from her strategy of hiring chief executives at the investment bank, as reported at the bank’s Investor Day in March. “We continue to invest strategically in talent and in the platform. You can expect us to continue to do so with a particular focus on the technology, healthcare and financial services sectors as these are the ones where it is a decade change that we are going see in their importance,” Fraser said during the latest The Weeklong Investor Call, despite the fact that M&A revenue in all three sectors fell dramatically in the first half of this year, according to Dealogic. the investment bank that just arrived from Barclays (where she was promoted to MD last year), or Jenner Kietz in leveraged finance from Deutsche Bank.

Morgan Stanley CEO James Gorman also said the bank invests in banks and bankers. Morgan Stanley isn’t investing based on the past “terrible” months, Gorman said: it’s about the “next ten years.” Nonetheless, he conceded that Morgan Stanley is also engaged in a “rather systematic examination of the prioritization of all the projects in progress around the company”, which implies that certain projects can be postponed.

At JPMorgan, Chief Financial Officer Jeremy Barnum said there was no expected slowdown in strategic hiring plans. Costs are still expected to be $77 billion for the entire bank, Barnum said. If anything, Barnum said numbers could increase “at a faster pace because we’ve kind of increased our hiring capacity.” The implication is that JPMorgan has more recruiters than before.

Like Gorman, CEO Jamie Dimon said it was about the long term: “IIn 15 years, global GDP—or 20 years, global GDP, global financial assets, global companies, companies over $5 trillion will all double. This is what we build for. We don’t build for about 18 months.”

Technology and controls are always a priority

Credit Suisse is cutting its technology budget, but US banks continue to make bullish noises about hiring engineers. At Citi, technology spending rose 14% in the second quarter and the bank now has 9,000 people working in risks, controls, data and finance. “We are actively investing in technology to improve automation and hiring people to support those efforts,” Mason said last Friday.

At JPMorgan, Dimon said it was foolish to engage in “stop-starts on recruiting” or technology spending. “This is mad. We don’t do that. We have never done that. We didn’t do it in 2008 and 2009,” he insisted last week.

Hire to cut costs

Finally, it should be remembered that, in some cases, hiring can itself be a means of reducing costs.

BlackRock has helpfully explained how this approach works. Jobs at BlackRock are “juniorized” where possible, says Shedlin, announcementDing that all of this year’s headcount growth at BlackRock will be at the junior level, and that 40% will be in “hub” (i.e., low-cost) locations.

As the downturn bites, it makes sense to hire, but hire cheap people.

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