June 23 (Reuters) – With growing uncertainty around the U.S. economic outlook and the resulting slump in financial markets, Wall Street is easing hiring after a hiring spree last year.

Wall Street firms, including banks like Citigroup Inc (CN), JPMorgan Chase & Co (JPM.N) and Wells Fargo & Co (WFC.N) faced fierce competition for hiring and were forced to pay more to recruit and retain talent in 2021 and early this year. Bonuses reached their highest level in 15 years. Read more

However, recruitment consultants, executives and recent data show that the hiring frenzy is waning.

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“The end of 2021 was white hot with unprecedented hiring and compensation demand,” said Alan Johnson, chief executive of compensation consultancy Johnson Associates. “It’s rapidly changing from warm white to normal, and maybe it’ll be cold by the end of this year. We’re definitely in a transition.”

The latest data from the US Bureau of Labor Statistics shows that while employers in the securities, commodity contracts, investments, funds and trusts category were still hiring, the pace slowed sharply in May with 1 200 jobs added that month, compared to 4,600 in April. That compares to a monthly average of 3,400 for 2021, when the sector saw its biggest annual increase in the workforce since 2000.

Alberto Mirabal, senior vice president of investment banking at recruitment firm GQR Global Markets, said some clients have paused some talent searches while waiting to “see how things develop” before expanding their already large teams. in a context of collapsing global markets. Read more

“We are seeing a slight slowdown,” he said.

Soaring inflation exacerbated by Russia’s invasion of Ukraine and resulting interest rate hikes are making some Wall Street firms nervous about the risk of recession. Read more

Some pockets of the financial sector are already experiencing layoffs, including the mortgage segment, which is particularly vulnerable to interest rate hikes that hurt home sales. Read more

JPMorgan Chase & Co (JPM.N) is laying off hundreds of employees in its home loan business and reassigning hundreds more this week, according to Bloomberg. Read more

But overall, recruiters said the industry is not yet experiencing broad hiring freezes or layoffs. And some smaller players, like boutique investment bank Lazard (LAZ.N), are looking to take advantage of the changing climate to attract talent for themselves.

Lazard chief executive Kenneth Jacobs said a slowdown in hiring was helping his company attract new talent after 2021, which he said was the toughest in a decade for staff retention and growth. remuneration.

“Competition for talent is diminishing,” Jacobs told a Morgan Stanley conference last week. “I think we’ll try to take advantage of that.”

Gloria Mirrione, research consultant at Korn Ferry for asset management clients, said she started to see “a more moderate pace of hiring” towards the end of March and April after a “hiring frenzy ” in the second half of last year.

Recruitment in the areas of environment, social and governance (ESG) and impact investing, a hot area for global investors in recent years, has been particularly busy, she added. .

“The level of work is more manageable, with perhaps a bit more uncertainty as to how the rest of this year will unfold,” she said.

However, recruitment trends vary on Wall Street.

Investment banks, in particular, are facing a tough time with year-to-date revenue down nearly 38% from the same period a year ago as deals plunge to the bottom. amid market jitters. Read more

“The biggest drop in activity is in equity capital markets,” according to Julian Bell, managing director and head of Americas at talent consultancy Sheffield Haworth. “This means that brokers, as opposed to full-service banks, will suffer disproportionately.”

Brokers in healthcare/biotech and technology, two of the biggest sectors in equity capital markets, will suffer the most, he said.

But with hiring slowing and salary expectations lower after unusually high pay in 2021, investment bankers aren’t worried about impending layoffs.

“They still think they’re relatively understaffed for the deal volumes they have,” said Anthony Keizner, managing partner at Odyssey Search Partners, whose clients include private equity, hedge funds and Investment Funds. Some clients still have a big appetite for talent, he said.

“Maybe the foot is slightly off the throttle, but the car is not about to crash,” Keizner said.

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Reporting by Sinéad Carew in New York and Saeed Azhar in Dubai; additional reporting by Lucia Mutikani in Washington DC, and Saqib Iqbal Ahmed and Elizabeth Dilts Marshall in New York. Editing by Michelle Price and Nick Zieminski

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