Singapore bank sector may cut hiring amid volatile markets, global financial job losses

[SINGAPORE] Mercurial stock markets, coupled with growing concerns that the US economy could be headed for a recession, are making banks in Singapore more cautious about hiring, recruiters said.

Athreya HD, partner in financial services consulting at Forvis Mazars, told The Business Times: “In Singapore’s context as a key financial hub, institutions are adopting a more prudent hiring strategy, focusing on critical roles essential to their core operations.” Together with “efforts to optimise workforce structures, driven by digital transformation, (this) could lead to a reduction in overall headcount”, he added.

Recruiters suggested that recent reports of big US banks laying off staff in their home market could ripple through to affect their headcount in Singapore.

Charnele Tan, assistant director of the banking and finance division at The GMP Group, said: “A looming recession, tariffs and trade uncertainties could lead to budget cuts or restructuring within American banks operating in Singapore. They have reduced their workforce across the Asia-Pacific region, which has resulted in job cuts in places like Singapore as part of the regional strategy.”

Morgan Stanley is the latest bank said to be slashing jobs. Bloomberg reported that the US investment bank is planning to cut 2,000 employees this month to contain costs. This follows its co-president Dan Simkowitz’s announcement on Tuesday (Mar 18) that merger and acquisition announcements and new equity issuance are “on pause”. The company is, however, still “adding real headcount” at its senior levels of investment banking.

Two weeks ago, Goldman Sachs was reported to have brought forward its annual round of job cuts; it is looking to reduce between 3 and 5 per cent of staff, largely in line with its earlier exercises.

Singapore is home to more than 2,500 licensed financial institutions, which employ nearly 200,000 workers. Of these, locals comprise over 80 per cent of the workforce.

While plans by Morgan Stanley and Goldman Sachs came before the recent stock market turmoil, further chaos could put more banking jobs on the line.

Roles at risk

Recruiters cited market-sensitive areas such as investment banking and trading as being the most vulnerable.

Since peaking on Feb 19, American equities have been on a bumpy path. On Mar 10, tech stocks tumbled by the most since 2022, amid fears that President Donald Trump’s tariff hikes, spending cuts and geopolitical manoeuvres would bring the US economy closer to a recession.

As corporates try to cope with these policy changes, the initial optimism surrounding increased banking activity is evaporating, adding to pressure on the lenders to keep costs low.

The rapid series of tariff announcements by the two-month-old US administration could also lead banks to trim hiring in related businesses, said Tan from The GMP Group. “The volatility in global trade can impact the demand for services such as cross-border financing, currency exchange and trade finance. In response, banks in Singapore might scale back hiring in teams directly impacted by trade, such as those in foreign exchange or trade finance,” she noted.

While Singapore’s non-oil domestic exports grew 7.6 per cent in February, reversing from January’s contraction, the figure missed the median 9.7 per cent growth forecast by private-sector economists. They also warned that export growth could slow if threats of further tariffs materialise. And despite optimism that a pick-up in initial public offering (IPO) activities in South-east Asia and Singapore could boost hiring in investment bankers, lenders are likely to take a cautious approach, said Linda Teo, country manager at ManpowerGroup Singapore.

“While there may be strategic additions to teams, particularly those with expertise in regional markets and complex deal structuring, large-scale hiring surges have not been widely apparent,” she pointed out. “It’s important to note that hiring in these areas can be highly sensitive to market fluctuations and the overall volume of deals, which remain subject to change.”

Volatility has spread to South-east Asia’s biggest stock markets. A collapse earlier this week brought Indonesia close to Thailand, in its posting of the steepest loss this year among 92 major equity benchmarks tracked by Bloomberg.

Automation investment

These factors are compounding structural changes within the banking industry, which has been investing heavily in automation and digitalisation.

This has therefore exposed those in technology, operations and risk functions in global banks to a higher risk of losing their jobs, said Lim Chai Leng, general manager of banking, life sciences, construction and property at Randstad Singapore. “Most of these functions are being augmented by artificial intelligence (AI) and emerging technologies, which makes them more susceptible to job cuts, as organisations look to consolidate roles and curb costs.”

DBS Group Holdings said last month it planned to slash about 4,000 of its contract and temporary employee headcount over the next three years as AI increasingly takes on roles performed by human beings.

One bright spot for banks’ hiring in Singapore is in wealth management, as the city-state remains a key hub for the business. Nomura Holdings, for instance, said this month that it is expanding its wealth management team in Singapore and Dubai. In February, Standard Chartered chief executive Bill Winters said that the bank is spending US$1.5 billion to hire more staff, including client-facing relationship managers.

The rising number of family offices in Singapore and expanding appetite for investing in private markets are also leading to “an observable demand for professionals with specialised knowledge in private markets, including private equity, venture capital and alternative investments”, ManpowerGroup’s Teo said.

In particular, the growing appeal of private credit is driving demand for those with expertise in deal sourcing, credit due diligence, valuation and portfolio management, said Randstad’s Lim.

In 2024, the number of single family offices in Singapore rose 43 per cent on year to exceed 2,000. At the same time, global investors are looking to allocate more funds to private markets. In a Hamilton Lane survey, the Asia-Pacific recorded the highest percentage of clients who were “very interested” in private markets, at 51 per cent.