A software firm that works with the world’s biggest investment banks to automate grunt work has laid off staff as a slowdown in deals begins to ripple across the industry.
Datasite, which provides virtual data rooms for investment banks and corporate finance lawyers during M&A transactions, announced plans to lay off staff in late October, sources told Financial News.
It cut between 70 and 100 of its approximately 1,000 staff globally, one source added, with around 20 in Europe, two people close to the matter said.
The ‘software as a service’ fintech firm provides data storage facilities for banks to safely store documents related to M&A transactions, seen as a vital part of the due diligence process.
Datasite works with “every one of the top 25 investment banks”, according to its website, but does not list client names.
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Datasite did not respond to multiple requests for comment.
Datasite’s job cuts come as a previously buoyant deal environment has slumped on the back of rising interest rates, surging inflation and whipsawing markets. Around $3.1tn has been spent on M&A deals so far in 2022, according to data provider Dealogic, a decline of 33% on the same point last year.
Meanwhile, dealmaking fees have dropped 41% to $65.7bn.
In December 2020, Datasite was acquired by private equity firm CapVest Partners for an undisclosed sum. Earlier this year, it unveiled plans to open a second UK office in Manchester to get closer to M&A professionals in the north of England.
After a recruitment spree in 2021, its banking clients have started trimming their ranks again this year. Deutsche Bank, Goldman Sachs, RBC Capital Markets and Berenberg have all cut bankers in recent weeks. Meanwhile, Morgan Stanley is also drawing up plans to cut some employees, primarily in Asia, Reuters reported.
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