HONG KONG • For years, Hong Kong was a hot spot with plum jobs for overseas bankers as global firms hired aggressively.
But many of the city's recently laid-off bankers are finding that cost-cutting and a demand for Mandarin speakers have diminished the opportunities for expatriates in Asia's financial hub.
After Deutsche Bank announced wide-ranging cuts this week, many employees worldwide are facing the challenge of job-hunting in a shrinking market. For foreign staff losing positions in Hong Kong, it could be harder than most. At the same time, the city's famously expensive living costs, including some of the world's highest rents, mean even senior bankers need to find new jobs fast in order to stay.
The upshot? Expat bankers who lost their jobs and want to remain in Hong Kong have to consider lower-paying options or demotions. Some with longer-running ties to the city are looking at switching careers, weighing everything from consulting to cryptocurrency outfits.
During the 2008 global financial crisis, Asian banks and local Chinese firms hired those laid off by foreign players, said Mr Will Glover, Hong Kong-based managing director for recruitment firm Macdonald & Company. That is less likely this year and some of those taking on new jobs may have to take pay cuts, he said.
"You get that volume of people anywhere into a market at one time and inevitably a lot of people will leave the market altogether. There will not be enough opportunities to absorb all that supply."
While global banks are ramping up their focus on China, more of them are looking for people with language skills and networks on the Chinese mainland.
A senior banker in Hong Kong, who is in his 50s and was laid off from a European investment bank this year, said he would like to continue to live in the city, where his children go to school. But he expects it to be hard to find a top job because banks are moving people internally or hiring more people locally. His monthly rent is about HK$100,000 (S$17,400), making it essential to find a job soon.
It is a dilemma faced by many others. One European banker laid off from a top Asian bank said he took a holiday and is now pondering working in a start-up or even moving out of Hong Kong after 20 years.
Deutsche Bank's website until Wednesday said it had more than 1,200 people in Hong Kong, although that figure has since been removed. The bank has cut about half its equities staff in Asia and plans to reduce the group by another 25 per cent within a month, a person familiar with the matter said.
A Deutsche Bank employee in Hong Kong, recently laid off, said many of her colleagues plan to stay in the city and are looking at positions in banking, family offices or asset management. She is hoping to use her background in compliance for another job in finance.
Former Deutsche Bank employee Su Zhu, who worked at the firm in Hong Kong until 2012 and now runs a Singapore foreign exchange and cryptocurrency fund, said that over the past year, many bankers have gone into the crypto industry.
Foreign banks can now choose from a widening pool of young professionals raised in Hong Kong, who speak multiple languages, know Chinese culture, have trained overseas and do not require expensive relocation packages. That makes it harder for foreign bankers in the city, as well as junior professionals attempting to move from overseas, to find new positions in Hong Kong.
A British equities trader who lost his job at a US investment bank said he spent almost four months interviewing at banks and hedge funds with no luck. He lost one position to a local candidate 10 years his junior, and is now considering leaving.
Expatriate executives in Hong Kong earn US$276,417 (S$375,900) a year on average, including benefits, according to a May report by consultancy ECA International, which analysed salaries from financial and non-financial firms.
Average pay scales lagged behind Japan, China and India, although affordable domestic help and a work-friendly visa system for trailing spouses help make Hong Kong attractive. But Hong Kong also topped a recent Deutsche Bank global ranking for the most expensive monthly rents on a two-bedroom apartment, and ranked 39th for disposable income after rent.
Senior expats have tended to live in expensive places and send their children to international schools, living off base salaries and saving bonuses, said Mr Benjamin Quinlan, chief executive officer of financial services consultancy Quinlan & Associates in Hong Kong.
"The expat's side of things is going to be significantly harder," he said. "A lot of people are going to have to lower their expectations, even get demoted and take any opportunity they can find, as opposed to waiting out in the market for a magic position to come up again, because it will not."