“Let’s define busy” read a memo circulated to rookie investment bankers at Donaldson, Lufkin & Jenrette in the mid-1990s. “You are busy if you are working each weekday at least 16 hours and at least 16 hours on the weekend. These are working hours—not travelling, gabbing or eating time. If these are not your hours at the office, you have the capacity to take on more work.”

Today’s bankers are more than willing to put in the hours—the problem is they lack the work to fill them. The fee bonanza caused by cheap money and giddy corporate bosses is long gone. Dealmaking revenues at the largest banks are down by almost half this year, and pipelines are nowhere near full. As revenues normalise, so do attitudes to hiring and firing. Last week Goldman Sachs, an American bank, began its annual cull of between 1% and 5% of staff, for the first time since 2019. An industry-wide hiring binge during the covid-19 pandemic means lay-offs will probably extend well beyond spring-cleaning. Wall Street’s human-resources departments will finally get to do the job they signed up for: sticking it to the salaried rich.

First for the chop are the underperformers. Think expensive senior dealmakers with rusty Rolodexes and the occasional knackered junior Excel-jockey. After that, choosing whom to show the door becomes an exercise in predicting where the market is going. “A real danger is over-firing and missing a bounce-back in activity as some banks did after the dotcom crash,” notes Jon Peace, a banking analyst at Credit Suisse.

Equity capital markets bankers will find themselves near the top of the hit-list. They are having a rotten year: the number of initial public offerings in America is down nearly 90% year on year. Few firms risk listing their shares while markets roil and chief-executive confidence is touching 40-year lows. Special purpose acquisition companies (SPACs), blank-cheque vehicles which raise money by listing on a stockmarket, are a distant memory. Bankers who made a killing in…

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