After Deutsche Bank AG announced plans for wide-ranging cuts this week, many employees worldwide are facing the challenge of job-hunting in a shrinking market. For foreign staff losing positions in Hong Kong, it could be harder than most.

Other international firms such as Nomura Holdings Inc. have also cut jobs in Hong Kong. At the same time, the city’s famously expensive living costs, including some of the world’s highest rents, mean that even senior bankers need to find new jobs fast in order to stay.

The upshot? Expat bankers who lost their jobs and want to remain in Hong Kong often have to consider lower-paying options or demotions. Some with longer-running ties to the city are looking at switching careers, weighing everything from consulting to cryptocurrency outfits.

During the global financial crisis of 2008, Asian banks and local Chinese firms hired those who had been laid off by foreign players, said Will Glover, Hong Kong-based managing director for recruitment firm Macdonald & Co. That’s less likely this year and some of those taking on new jobs may have to take pay cuts, he said.

“You get that volume of people anywhere into a market at one time and inevitably a lot of people will leave the market altogether," Glover said. "There will not be enough opportunities to absorb all that supply.”

Read more: Deutsche Bank Cuts Start From Sydney to Mumbai

While global banks are ramping up their focus on China, more of them are looking for people with language skills and networks on the Chinese mainland. That could help Deutsche Bank staff from around the world who are Chinese citizens, and who have been sending resumes seeking jobs back home or at Chinese banks. But for Westerners in Hong Kong, the prospects look tougher.
Looking to Stay

A senior banker in Hong Kong who is in his 50s and was laid off from a European investment bank earlier this year said he would like to continue to live in the city, where his children go to school.

But he expects it to be hard to find a top job because banks are moving people internally or hiring more people locally. His monthly rent is about HK$100,000 ($12,800), making it essential to find a job soon if he decides to stay.

It’s a dilemma that many others are grappling with. One European banker laid off from a top Asian bank said he took a holiday and is now pondering working in a startup or even moving out of Hong Kong after 20 years.

Deutsche Bank’s website until Wednesday said it had more than 1,200 people in Hong Kong, although that statistic has since been removed. The bank has cut about half its equities staff in Asia and plans to reduce the group by another 25% within a month, a person familiar with the matter said earlier this month. Deutsche Bank didn’t comment on the size of its layoffs in Hong Kong.

A Deutsche Bank employee in Hong Kong, recently laid off, said many of her colleagues plan to stay in Hong Kong and are looking at positions in banking, family offices, or asset management. She’s hoping to use her background in compliance for another job in finance.

One former Deutsche Bank employee, Su Zhu, who worked at the firm in Hong Kong until 2012 and now runs a Singapore foreign exchange and cryptocurrency fund called Three Arrows Capital, said that over the past year many bankers have gone into the crypto industry.

Read more: Deutsche Bank’s Long Road Back to Its Old Normal

Foreign banks can now choose from a widening pool of young professionals raised in Hong Kong, who speak multiple languages, know Chinese culture, have trained overseas and don’t require expensive relocation packages. That makes it harder for foreign bankers currently in the city, as well as junior professionals attempting to move from overseas, to find new positions in Hong Kong.

A British equities trader who lost his job at an American investment bank this year said he had spent almost four months interviewing at banks and hedge funds with no luck. He lost one position to a local candidate 10 years his junior, and is now considering leaving.

Expatriate executives in Hong Kong earn $276,417 a year on average, including benefits, according to a May report by consultancy ECA International, which analyzed salaries from financial and non-financial firms.
Pay Scales

Average pay scales lagged Japan, China and India, although affordable domestic help and a work-friendly visa system for trailing spouses help make Hong Kong attractive. But Hong Kong also topped a recent Deutsche Bank global ranking for the most expensive monthly rents on a two-bedroom apartment, and ranked 39th for disposable income after rent.

Senior expats have tended to live in expensive places and send their children to international schools, living off base salaries and saving bonuses, said Benjamin Quinlan, chief executive officer of financial-services consultancy Quinlan & Associates in Hong Kong.

“The expat’s side of things is going to be significantly harder,” Quinlan said. “A lot of people are going to have to take down their expectations, even get demoted and really take any opportunity they can really find, as opposed to waiting out in the market for a magic position to come up again because it will not.”