Securities companies cut staffs

Friday, May 9, 2008
The golden age of securities companies is over. This time last year, companies were trying to recruit more staffs, while they are trying to cut staffs now.

The director of the HCM City branch of a securities company, who asked to remain unnamed, said that the income of the company is not enough to pay staffs.

He said that the brokerage fees the company collects from clients have been decreasing due to the market’s continued falls. “Last year we could earn VND300mil a day and VND40bil a year, while we paid VND10bil to the staffs. Nowadays, the brokerage fee is just VND20mil a day.”

The branch, which previously had 30 brokerage officers, now has 20 only, as the company is trying to cut expenses. The number of investors has dropped by 50%; a lot of investors are going to the trading floor just to explore the situation, while not making transactions.

In fact, securities companies have other sources of revenue, including revenue from share trading activities. However, as stock prices keep falling, the trading activities do not bring profit. Sources say that some companies still hold a huge volume of shares which now have market prices of only 40-50% of the prices at which they purchased stocks.

In late 2006 and early 2007, securities companies noisily expanded networks and opened more branches and transactions points, employing more staffs. The situation is quite different now: many companies have had to cancel their network expansion plans and cut jobs.

Last year, a new staff who just graduated from university was paid VND4-5mil a month, while he is now paid VND2.5-3mil/month only. A company reportedly paid VND1,500-2,000 at least for a division head, and the high pay has become a heavy burden on these companies now.

However, optimistic securities companies’ leaders say that now is a golden opportunity for securities companies to ‘filter’ staffs. Previously, when companies rushed to recruit staffs to serve the developing business, they did not have enough time to examine candidates.