Major investment banks are set to cut entry-level recruitment next year as high-profile job cuts have hit the sector, yet dealmaking roles at top institutions attracted more than 600,000 graduate applications.
Top investment banks plan to reduce graduate recruitment numbers by 10 per cent in 2024, according to research firm High Fliers, despite many firms increasing entry-level hiring in 2023 amid a deal drought that has seen thousands of job cuts. Investment banking graduate jobs are notoriously hard-fought for, with top European and Wall Street firms hiring a small fraction among the huge numbers that vie for roles offering starting salaries of £70,000 in London.
JP Morgan received 198,584 applications for its graduate programme globally this year, which is an increase of 30 per cent. This was for 5,469 positions, or a success rate of less than 3 per cent. Within its investment bank, it had 11,871 graduates competing for 298 full-time positions.
The top US investment bank hired 98 graduates for its investment banking team in Europe, Middle East and Africa (Emea) last year, which was an increase of 4 per cent on the previous year, and received 7,013 applications – up by 32 per cent. It also filled entry-level roles through summer internship conversions.
Morgan Stanley’s summer internship applications in Emea edged up 3 per cent to 42,412 this year for 900 roles, which was an increase from 816 in 2022. However, it hired 309 full-time graduates in the region in 2023, down from 326 a year earlier. The US bank took on 333 summer analysts and associates this year.
Citigroup got more than 60,000 applications for around 950 intern and full-time recruits across its businesses in Emea, while Bank of America saw 300,000 graduates compete for 2,600 roles globally this year. At Goldman, 2,900 interns joined globally, 360 of which were in Emea. Deutsche Bank hired 1,137 graduates this year, up from about 900 last year, while HSBC took on 230 students in its global banking and market units.
Investment banks have rolled out their deepest job cuts since the 2008 financial crisis after a deal drought forced fees down 26 per cent this year following a difficult 2022. Goldman Sachs cut 3,200 jobs in January and followed them with another 125 managing director redundancies in June. Morgan Stanley and Citigroup have also made deep cuts that have hit their dealmaking teams.
Meanwhile, junior jobs in particular have come under more scrutiny. Analysts and associates at investment banks work long hours often in relative mundane tasks such as updating power point presentations for clients and pulling numbers for deals.
A leaked document by a group of Goldman Sachs analysts in 2021 outlining brutal 100-hour weeks amid an unprecedented deal boom had a snowball effect. Analysts rebelled against working conditions, quit in droves and banks hiked salaries by 30-40 per cent in the space of a year to stem the exodus. However, this year juniors have been included in some round of job cuts.
Logun Naidu, Chief executive of recruiters Dartmouth Partners which works on graduate roles, said that investment banking applications have “declined modestly” in recent years as top students pursue roles in technology and private equity.
“It is still hugely competitive and my feeling is that this year it will get more competitive as technology and private equity firms have also pulled back hiring,” he said. “Any industry paying such high salaries inevitably attracts a lot of top graduates.”
While entry-level roles remain intensely competitive, Naidu said that students often do not view investment banking as a long-term career. “Some go in with a view to a steep two-to three-year learning curve before moving on,” he said. “No doubt long-term banking has lost some of its lustre.” (The writer is our foreign correspondent based in the UK)
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