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Will the crisis at Bear Stearns, and Lehman’s plan to axe 5% of its global workforce, mean heads will roll in Asia?

Lehman is making no formal comment on the plans but it’s understood that while cuts will be made across all businesses in all regions, the majority of the redundancies will bite in the US and Europe.

What is likely is that the cuts will act as a brake on the bank’s expansion plans in Asia, argues Gary Lai, manager of front-office banking at recruiter Robert Walters in Singapore.

“At the moment, its base here is still quite small so there is a lot of room to grow, but it will probably be more cautious in how it goes about expanding,” he explains.

There is also the possibility of it transferring staff across from the US.

“Foreign investment banks are now much more open to bringing over talent. They realize they have spent a lot of time and money in training people and if someone has been successful in the US there is no reason why they cannot be successful here,” Lai adds.

Bear Stearns might, however, be a different matter. The bank currently has offices in Tokyo, Hong Kong, Beijing, Shanghai and Singapore, and the overlaps with JPMorgan – or any other banks that JP sells Bear businesses on to – are likely to be significant, making redundancies inevitable.

According to Reuters, Bear's Asian employees are already looking for new jobs, while the addition of 500 Bear Stearns staff in the region may encourage JPMorgan to curtail its local hiring plans.

Despite Bear and Lehman’s dampener, the overall recruitment climate in Singapore and Hong Kong remains positive, if not as stratospherically upbeat as at this time last year.

Barclays Capital has said it is to hire 1,500 staff in the region over the next couple of years, boosting its headcount by more than 40%. Goldman Sachs, HSBC, Morgan Stanley, UBS and Merrill Lynch have also all been hiring.

And a survey by recruitment firm Manpower has predicted a “dynamic” hiring environment for financial services in Singapore and Hong Kong for the next three months.

“It is perhaps not as busy as this time last year but there is still work to be done,” argues Steve Parkes, manager, financial services division at Michael Page International in Singapore.

Growth areas include product control, internal audit and compliance. There is also currently a lack of regulatory reporters with experience and knowledge of local markets, he argues.

Lai, in turn, identifies continuing strong demand for risk management specialists, compliance and operations staff.

But in areas such as DCM the outlook remains more cautious, he adds.