China's CICC to Demote Senior Bankers, Cut Pay to Slash Costs

The thinking that if you, if I give demotions to some of the underperforming bankers is going to prompt voluntary. Departures, but I mean it’s quite difficult, more difficult in Hong Kong to layoff some of the people. And this is a smart way to them to, you know, make some to let some of people live without making them redundant, which will result in very hefty fees and severance packages, right. And this is broadly part of a cost cutting drive, isn’t it? Right. Yeah, exactly. As we can as we have seen in Hong Kong and also Mainland China, you know a big, a big chunk of the business is IPO, right. And that has been going that that’s been down quite drastically. So deals making is not is, is, is. Is volume is down and over the years because of the when the time is booming they’re over hired a lot of people. And now CICC is apparently the biggest investment bank in China that hired more than 2000 bankers across the country, right. So this new scheme actually would help them to rate those 10% of the bankers as like really underperforming and they will see their title to be demoted. For example, if you are managing directory, there is a 10 percent, 10% of them that will be demoted to the exact director and then there is another 10%, sorry 20% of the bankers. Those regarded as underperforming, they will see a small demotion, which means, for example, if we’re as associate to UBS demoted to associate one. Wow. Yeah. I mean just talk a little bit more about CICC specifically as well. I mean this was once a bank that paid as much as Goldman does, but then they’ve also had to scale back this whole hedonistic lifestyle. So we kind of saw this coming maybe before too, right? Yeah, for at one point I think CICC is really like, you know, considered as the Goldman, Goldman Sachs of China, right. They the bankers. The higher law of bankers are all across China. Every deal, pretty much not every deal but you know a lot of those deals, you know you see CC ICC on them right. And they’re also like the worst hits bank in the past few years, right. I mean not only deal making wise but also politically. I think some of the bankers you know especially those junior banks make some like flat they post some flashy lifestyle on the social media right. And then got criticized on social media became like a huge hit And then the regular I think Beijing was unhappy about it and then try you know pounded the bank and lost some of the bankers say hey you know you guys should really stop you know the the hedonistic lifestyle right now so. You know, get rid of the image of the circle, financial it till elitism.