The first-quarter has been a fairly mixed one for recruitment firms, as investment banks, fund managers and other market participants have been more cautious than 2010 when it comes to beefing up headcount.
And with firms now busy working out their Q1 profits, recruiters are beginning to fret that the lead up to the summer, traditionally their busiest time of the year, might not be as lucrative as they had hoped.
One recruiter told us: 'We have seen a number of firms, like Goldman, letting staff go following their annual appraisal processes, but there seems to be no rush to find replacements. I think the industry is very wary right now, and wants to place its foot on the headcount ball pending clarification on how things such as local / global regulation, political unrest, natural disasters like what has happended in Japan, etc, are going to play out in the global economy'.
And The Financial Times quotes Morgan Stanley analyst Huw van Steenis, who has warned that much broader based job cuts (rather than the kind of tinkering around the edges we have been seeing since last summer) will be required in an industry 'where costs (have) remained broadly flat in 2010, in spite of a 20% decline in revenues'.
In a report Morgan Stanley has published jointly with consultants Oliver Wyman, Van Steenis says: 'Banks need to take hardheaded portfolio and investment decisions today, as well as become more efficient. We think banks have to take out 6-8% of costs in the next 12 - 18 months'. And these cost-savings are expected to come from a mixture of job cuts, technology improvements and improving business synergies.