Morning Coffee: JPMorgan's coming rounds of relentless job cuts. Negotiating a $50m hedge fund bonus

As we noted when JPMorgan reported its fourth quarter results last month, the bank had been cutting heads in its corporate and investment bank despite a strong quarter. Now it seems to be cutting heads again.

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Barrons reported yesterday that JPMorgan will be making layoffs "throughout 2025." Barrons says JPMorgan has already begun making cuts this month, and that it will be making more cuts in "mid-March, May, June, August, and September." The bank said the cuts are all part of its "regular management of the business" and that only "a very small number of employees" will be impacted. 

It's not clear whether the many rounds of layoffs will impact JPMorgan's corporate and investment bank. The bank removed 523 people, net, from the business in the final quarter of last year. Barrons says some of the current round of cuts will hit the Houston office, which mostly seems to employ private bankers and technologists. 

JPMorgan has been hiring too. Search firm Sheffield Haworth says it added 19 managing directors to its US investment bank last year. However, it lost another 21 MDs, and so ended the year down.

Separately, Business Insider has some advice on how to negotiate a $50m pay package at a hedge fund. 

Firstly, you have to negotiate your share of profits from your trading strategy. - 20% is the norm, but if you're a star you might get 30%. If you're an unproven new portfolio manager, you might only get 12%-17%. 

Secondly, you must know about "accelerators." which can increase the proportion of profits you get to keep in the short term. For example, a desirable portfolio manager (PM) might be able to negotiate a higher payout of 30% on the first $20m in profits alone. 

Then you need to define things like: risk limits, capital, the amount of the costs your team will bear versus the fund itself. You should get a payment to cover any bonuses you're losing at your current employer, and you must scrutinize the clawbacks and caveats. Business Insider says clawbacks have become more common in hedge funds and that both Millennium and Brevan Howard now add "break clauses" when they're hiring expensive portfolio managers. These state that if you don't join at all, or if leave soon after, you have to pay a penalty that could be millions of dollars.

Meanwhile...

VTB Capital seems to have some of the best jobs in London. The Russian bank only employs 12 people and last year it paid them £10m in total as it winds down. The wind down is (unsurprisingly maybe) being extended to 2029. (Financial News)   

Gabe Gelman, head of Americas equity capital markets at Goldman Sachs, is leaving for a hedge fund after David Solomon said Goldman needs to pay like a hedge fund. (Bloomberg) 

Pimco opened an office in Dubai. (Bloomberg) 

Robinhood is opening in Singapore. (Bloomberg) 

Bank of America doubled the size of its Swiss banking team as it attempts to gain market share vacated by Credit Suisse. (Reuters) 

Linking bonuses to office attendance is risky. “If a corporate says, ‘You won’t get a full bonus if you’re not in five days a week’ you could get yourself into equal pay or discrimination territory.” (Financial Times) 

McKinsey & Co. says it's still prioritizing diversity (and meritocracy) across its workforce. (Bloomberg) 

A woman running bottle service training programmes claims that $200k to $400k a year. But you need to know how to open a bottle of champagne. (NY Post) 

Photo by Anastasiia T. on Unsplash

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