SINGAPORE - Maybank Kim Eng has laid off 5 per cent of its local workforce as the brokerage sector faces stiffer competition brought about by financial technology.
The investment banking and securities broking arm of Malaysia's largest bank announced the job cuts in an internal memo last Friday, The Business Times reported on Tuesday (Dec 10).
The report added that Maybank Kim Eng has a headcount of about 600, comprising 400 full-time employees as well as self-employed remisiers, which means that about 30 positions were axed.
A spokesman for the firm told The Straits Times that it is going through restructuring.
"Maybank Kim Eng plans to capture new market segments via new product offerings, align its distribution channels, as well as enhance client offerings and connectivity across products," he added.
Maybank Kim Eng chief executive Ami Moris said in a statement: "With this exercise, we have had to restructure some parts of our operations, namely the Singapore Retail Brokerage, Regional Institutional Sales and Research, and Hong Kong Investment Banking and Advisory businesses."
"Regrettably, this had necessitated a review of our staff strength to an optimum level, which affected 3 per cent of the Maybank Kim Eng workforce," she added.
Ms Moris noted that the investment banking landscape has evolved dramatically over the last few years due to shifts in customer preferences and dynamic changes in the markets. It has seen increasing automation and digitalisation of brokerage offerings, as well as changes in the regulatory environment.
Associate Professor Lawrence Loh at the National University of Singapore Business School said that the brokerage sector is facing severe headwinds, especially with disruptive technology such as automation and digitalisation.
"Retail investors are getting more savvy and can perform many tasks themselves online, thus skirting the need for human assistance," said Prof Loh, who is also the director of the Centre for Governance, Institutions and Organisations.
CIMB Bank Private Banking economist Song Seng Wun also noted that the brokerage sector is facing tough times as "margins are razor thin".
Added Prof Loh: "The layoffs here mirror challenges faced recently by global investment players which also saw layoffs, including Charles Schwab, JPMorgan, Morgan Stanley, Nomura and Societe Generale."
Maybank Kim Eng is the 15th-largest broker in Singapore with a 3.38 per cent market share.