The prolonged falls of the stock market have been afflicting securities firms. Cutting jobs proves to be the only thing the firms can do now to cut expenditures.

Revenue decreases, trying to cut expenditures

In the golden age of the stock market, brokerage services could bring VND400mil on average every day to a securities firm, enough to pay for the firm’s staff. However, the situation is quite different now: as the market remains lackluster and investors aren’t making transactions, securities firms cannot live on these services anymore. They still can earn money from investment activities; however, in the context of the falling market, investment deals do not bring a great deal of profit.

It is estimated that every securities firm has to spend VND500-700mil a month to pay for office leasing and staffs. In order to get that sum of money, it needs to serve transactions worth VND100bil every day with the transaction fee of 0.2% on average. Meanwhile, statistics show that the trading volume in the past few days at the HCM City Stock Exchange and Hanoi Securities Trading Centre was just several tens of billion VND only.

As a result, securities firms are now thinking of cutting jobs to cut expenditures, and lowering salaries of staffs.

Viet, a broker at G. securities firm, said that there are only some 30 investors’ accounts opened at his firm. Viet and other staffs of the firm have been asked to find new clients for the firm, and if they cannot, they will be sacked.

Preparing for the worst

Luu Tuong Bach, the former General Director of a securities firm, said that he has jumped into another business: giving consultancy in merger and acquisition deals. Bach said that small securities firms will be dissolved or merged into bigger ones in several months.

Bach said that the staffs in securities firms have been trying to escape from their jobs, seeking new paths. “The number of jobs will be cut by 1/3,” Bach said.

The General Director of T., a big securities firm, said that his firm is not making profit in this period. He has been trying to cut all unnecessary expenses to survive.

Just several months ago, when the stock market was in its golden age, securities firms all offered high salaries to attract staffs. Linh, who graduated from the accounting department of a college, and followed a short-term training course provided by the State Securities Commission, found a good job at D. securities firm with the pay of VND4mil a month. But nowadays, with securities firms trying to cut jobs, Linh is looking for another job.

The question plaguing Linh and many other staffs of securities firms is: Where do they go?

Securities staffs, where to go?

In 2007, securities firms paid a newly graduated staff a starting salary of VND4-5mil/month, and now the figure has decreased to VND2.5-3mil.

Quang, who worked as a securities expert for a securities firm and three investment funds for five years, wrote on his blog that he was seriously depressed. Finally, he decided to give up the job of a securities analyst, and now works as a tour guide, which he did when he graduated from university. “Being a tour guide is a good job; it can help me practice English,” he said.

One or two years ago, a lot of people decided to give up their jobs to seek new opportunities in another field, the stock market. Nowadays, realising that the new jobs cannot bring money, they are trying to seek other jobs, again.

Dung, a consultancy officer, officially quit his job when the VN Index dropped to 420 points. The job of a securities consultancy officer once brought him VND16mil ($1,000) a month, but he has no more opportunity with it. Dung still does not know where to go, but finding a job is not a difficult task for him, because he is qualified. Other staffs are not as lucky as Dung: they fear that they will not be able to find any other job.

Securities firms seeking jobs for… staffs

Securities firms, who once signed agreements on not stealing staffs from each other, are now shaking hands to find jobs for their staffs.

Huynh Ngoc Anh, Human Resource Director of Gia Quyen Securities Company, said that previously, securities firms had to persuade staffs to work for them. Therefore, nowadays, in the difficult period, firms should still have responsibility towards them.

Securities firms are restructuring their staffs. Brokerage and consultancy officers have been asked to join accounting divisions, and have to do marketing to seek new clients for the firms. Anh said that it is now the right time to retrain staffs.

In some securities firms, staffs are now working in shifts with more days off and lower salaries. They are struggling every day to survive the difficult period.