Investment bank Berenberg cuts 5 percent of its staff as recession grips city

A major European investment bank is cutting more than 5 percent of its staff in London as a recession hits the city.

Bosses at Berenberg, Germany’s oldest lender, told staff on Monday some 30 jobs will be cut as deals dry up and recession fears mount, The Telegraph can reveal.

The bank currently employs around 500 people in London, a Berenberg spokesman said, including administrative staff and private wealth staff.

Berenberg is one of the first investment banks in the city to lay off staff in view of the deteriorating economic outlook. The Bank of England warned last week that the UK is at risk of a 15-month recession from the end of this year.

IPOs and fundraising — both big revenue drivers for boutique investment banks like Berenberg — have already ground to a halt since Russia invaded Ukraine in late February.

In an email to staff on Monday, seen by The Telegraph, David Mortlock, Berenberg’s managing partner, said: “The year 2022 is clearly a much more challenging environment. In terms of stock issuance, it’s the quietest year since 2003 and one of the biggest [year-on-year] always decreases.

“In response, we have taken steps to ensure our investment bank’s cost base is reasonable. We significantly slowed hiring earlier in the year, relaunching our US business in June and now adapting our European platform. We have also taken steps to reduce core costs across the bank.

“While many of these decisions are difficult, by taking early and decisive action, we can have confidence in the sustainability and direction of our business into 2023 and beyond.”

In June, Berenberg laid off nearly a third of the bankers in its New York office, about 50 employees, citing difficult market conditions.

The job cuts highlight how quickly the fortunes of City investment banks have deteriorated after a hugely lucrative post-pandemic dealmaking boom last year.

Berenberg has had a record year for its investment bank, with advisory fees and equity trading revenue reaching 471.6 million euros, an increase of more than a third.

Last year, after the best twelve months in Berenberg’s 432-year history, Mr. Mortlock took home 20 million euros.

A spokesman said: “Following the 50 job cuts in the US announced in June, there are currently no other major changes in the number of employees apart from the usual adjustments that are always taking place.

“We have postponed the increase in personnel planned at the beginning of the year due to geopolitical events and developments in the markets.”