Banks around the world are cutting sales and trading jobs in an attempt to reduce costs, and the volatility in the forex market has put currency traders in the firing line.

Last year currency trader layoffs exceeded those in equities, corporate finance and advisory, fixed income, currencies and commodities trading. The Coalition Development, a London-based provider of financial research and analytics, reported that the 12 biggest banks cut currency staff by five percent in 2015. Since 2010, they have cut the forex headcount down more than a quarter, at 28 percent.

According to the UK and US central banks, currency trading in those regions shrank by more than 20 percent in October year-on-year. The $5.3trn-a-day currency market has managed to transform itself more into an automated system, which has significantly reduced the need for staff and coincided with declining volumes. With a 19 percent surge in revenue spurred by elevated volatility, Coalition’s head of research George Kuznetsov suggests that this is unlikely to stem further cutbacks in the coming years.

“The outlook for headcount is negative to neutral,” Kuznetsov, Head of Research and Analytics at Coalition, said in a Feb 19 interview. “Last year’s spike in revenue didn’t necessarily make banks change their opinion about the foreign-exchange market.”
Banks that decide to make further cuts to forex desks will likely cede market share and be forced to reduce activities in some currency products or markets, Kuznetsov said.