(Yicai) May 9 -- Many Chinese securities firms and investment banking companies are resorting to laying off staff, slashing wages and reshuffling job roles after revenue plunged 30 percent in the first three months from a year earlier.

China International Capital Corp. has already decided to lay off one third of the employees in its investment banking division and to slash salaries by 25 percent, Yicai learnt from sources familiar with the matter.

CICC has yet to respond to Yicai’s attempts to contact it to confirm this information.

CICC’s net revenue from investment banking commissions slumped 25 percent in the first quarter from a year earlier to CNY450 million (USD62.3 million), according to the Beijing-based firm's latest earnings report. And last year it plunged 47 percent year on year to CNY3.7 billion (USD512 million), while in 2022 it dipped 0.4 percent to CNY7 billion (USD968.7 million).

As business shrinks, lay offs will become more common, a market insider told Yicai.

CICC was hiring aggressively in recent years. Its headcount in its investment banking division jumped to 2,410 at the end of 2022 from 1,526 in 2020. This was then reduced to 2,370 as of the end of 2023, but it still accounted for 16 percent of its total workforce, according to the earnings report.

On top of these measures, other securities firms are moving employees into different roles and shifting their investment banking focus, Yicai learned. Citic Securities, for instance, reshuffled its investment banking division, moving some staff out of the equity segment to debentures and other departments.

The size of China’s equity financing market had contracted 73 percent as of yesterday from a year earlier to CNY138.8 billion (USD19.2 billion), according to financial data provider Wind.

The amount raised through initial public offerings shrank 79 percent over the period to CNY26.3 billion (USD3.6 billion), that of the additional issuance of shares plunged 73 percent to CNY84.3 billion (USD11.6 billion) and that of convertible bonds plummeted 64 percent to CNY20.4 billion.

Editor: Kim Taylor