Meltdown will not singe future of staff in India

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New Delhi, Sep 21: As the US investment banking empire falls, recruitment analysts say, the future of the possibly scathed Indian employees may not be daunting after all.

The top four investment banks employ approximately 6,500 people in India. Of which Lehman Brothers reportedly has 2,200 to 2,500 employees, including those in the BPO unit, Merrill Lynch has 600, Morgan Stanley has 500, and Goldman Sachs have about 3,000 employees in Bangalore, of which 100 are working on investment research. While Lehman Brothers has about 200 employees in investment banking, it has no retail business in India. Earlier this year, the firm had shutdown its mortgage capital division employing around 150.

Both Morgan Stanley and Merrill Lynch on the other hand have a Mutual Fund joint venture in India, and Goldman Sachs is into asset management, commodities, financial derivatives, mergers and acquisitions, private equity businesses. The company also has a big technology operation, which has back office support here.

“The four banks are ‘overlevered’, Lehman Brothers and Merrill Lynch more than Goldman Sachs and Morgan Stanley”, says Korn Ferry’s office managing director, Deepak Gupta.

On the other avenues available for these employees, Gupta told FE, “private equity funds, hedge funds, and strategy consultancies would be interested in the investment banking profile. However “a slump in salary levels” and a huge drop in demand in pure investment banking jobs can be expected.” Gupta further adds,

“Some of the European banks which have not been impacted by the US sub prime crisis and are possibly in expansion mode would be strong contenders for these candidates.”

Even as employees’ hustle and recruiters speculate, the final word is not out on the fate of the approximately 2,200 Lehman Brothers’ back office employees in India. “For the back office, the chances are that it will get picked up ‘lock stock and barrel’ and would be a very good buy for any contender because of the quality of the talent pool and their infrastructure”, says E Balaji, CEO Ma Foi Management Consultants Limited, “however, these talks are happening at a US or UK level within the firm.”