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Our Bureau

Mumbai, Nov. 24 More and more employees at broking firms are being shown the door, as brokerages struggle to cut their overhead costs in a flat equities market.

Officially, brokerages soft pedal the issue saying they are only “rationalising”. However, employees across brokerages confirmed that job cuts and salary reductions have been happening in their companies.

With the fall in the turnover and volumes by around 30 per cent since April in equities trading, revenue at broking houses has fallen to new lows. The turnover on BSE in the month of October has fallen to levels last seen in April last year.

At Motilal Oswal Financial Services, there have been job cuts and salary cuts of around 20 per cent, said sources. Close to 150 people who have been laid off, said a research analyst with the broking firm.

According to sources, Edelweiss has also laid off a huge number of employees. Sources estimate the number to be anywhere between 150 and 300; at certain branches and departments such as sales, employee reductions have been large.

The company has denied the job cuts and said that there has been no mass layoffs. “To ensure peak operational efficiency there has been some retraining and redeployment of staff from other lines of businesses where surplus capacity may have developed,” a spokesperson from Edelweiss said.

Sharekhan Ltd has also laid off about 100, in addition to implementing salary cuts.

Another broking firm, Pioneer Investcorp, laid off around four employees less than a month ago, said a source.

According to sources in India Infoline, there has been a trimming of employees’ cost-to-company, though their monthly salaries have been left unchanged. Quarterly bonus and other perks have gone, said one employee.

At Geojit Financial Services, considerable relocation of employees to overseas branches have been made, said an official at the brokerage.

Often employees at these brokerages are not directly asked to leave, but given near-impossible targets or an unsuitable change in job profile.

“People are given volume targets then asked to leave if those are not achieved,” said one employee at a brokerage.

“Many broking firms have begun to run a parallel insurance business also, where the target assigned to employees range from selling a minimum of policies in addition to their brokerage targets, and even ensuring new account activations,” said Mr Nikhil Bhatt, an independent investment advisor.

While pink slips continue to be issued, there have been some appointments at higher levels. In the past two months BNP Paribas Securities, Tata Capital Ltd, Credit Suisse, Motilal Oswal Group and Morgan Stanley have hired professionals at executive levels

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