Second-quarter dealmaking returns were higher than expected, but Wall Street is still nervous.
A cloud of uncertainty that started this year hasn’t retreated, slowing bank hiring.
Some banks have continued with layoffs, including Goldman Sachs and Barclays.
Dealmaking is back. Hiring? Not quite.
Big banks wowed investors last month when they reported better-than-expected revenues from dealmaking in the second quarter, introducing a wave of cautious optimism across Wall Street. IPOs, including the one from Figma, gave equity capital markets teams reason to celebrate. A new KPMG report on mergers and acquisitions found that second-quarter deal values were up 22% quarter over quarter, amounting to $123 billion in value overall.
At private credit giant Apollo, business has been booming: “The team is working as hard as I’ve ever seen,” CEO Marc Rowan said recently, citing a surge in in‑office presence. “It is among the busiest Julys we have ever seen in our business.”
Yet beneath that bravado lies a more nuanced picture: Sure, dealmaking hasn’t bottomed out the way some feared in the spring, but some job cuts are still unfolding behind the scenes, Business Insider has learned. Year-end bonus forecasts appear tepid in sectors like M&A advice and private equity investing. Hiring has yet to ramp up en masse, and executives continue to emphasize the need for “efficiency,” pointing to disruptions from artificial intelligence and geopolitical uncertainty.
Eric Li, head of global banking research at analytics firm Crisil Coalition Greenwich, expressed surprise at the level of layoffs he’s witnessed this summer in his role advising investment banks.
“Investment banking numbers actually beat estimates by a long margin, and people are still doing layoffs in July and August,” Li said, adding: “It’s not really rational if you ask me.”
“Uncertainty is probably people’s biggest concern,” he added, saying that jitters sparked by President Trump’s tariffs and other geopolitical turmoil haven’t abated. “Which means that we’ll continue to see corporates holding cash, preparing for the rainy day.”
At Goldman Sachs, second-quarter investment banking fees jumped 26% with M&A advisory revenue surging more than 70%. Yet the bank saw headcount decline by roughly 2% to 45,900 in the most recent quarter. A New York State WARN notice filed in March says it plans to part ways with an additional 338 NYC-based staffers later this month.
The bank said the August job cuts are tied to an annual culling of underperformers it conducted earlier this year — not economic activity.
“This is the same annual talent review that was announced months ago. Many of these positions can and will be filled with new people in New York and our other offices,” a spokesperson for the bank told Business Insider.
Barclays cut several staffers from its Los Angeles-based financial sponsors team in what appears to be a larger reorganization of that team, according to a person familiar with the matter. Some roles are expected to be moved to San Francisco, where the team’s new MD is based, this person said.
JPMorgan’s chief financial officer, Jeremy Barnum, earlier this year said his firm has instructed managers to “resist” hiring and to double down on “their focus on efficiency.”
One senior dealmaker pointed to the rise of private credit as a factor behind summer cuts at banks.
“What traditionally used to be done at some of the larger banks has now moved into some of the larger alternative asset managers and insurance companies,” the banker said, speaking on the condition of anonymity to discuss industry practices. “Some of those changes are because of the advent of private credit.”
Banks are showing some signs of selective onboarding — but those efforts remain measured.
Sophia Samadian, an investment banking recruiter at Selby Jennings, said her clients are “still being selective” about who they hire but pouncing on the “strategic” hires more quickly than before — a signal that momentum may be picking up.
“Once they identify the right talent,” she said, “they’re moving faster than we’ve seen.”
Indeed, some smaller or boutique firms have been scooping up bankers in anticipation of a busier second half of the year. Jefferies poached several senior tech investment bankers from Guggenheim Partners to bolster its presence in the Bay Area, which Reuters first reported in May. Evercore poached a top JPMorgan industrials banker in July to serve as a senior managing director.
Even if M&A surges back to 2021 levels, AI could still dampen hiring, said Chris Connors, a principal at Johnson Associates, who predicted that headcount at banks will “trend lower” over the long term.
“I don’t think you’re going to see gangbusters hiring,” Connors concluded. From here on out, “I think it’s going to be strategic hiring.”
