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Our 2026 Looking Ahead Report explores the trends, developments, and emerging risks shaping financial services in the year ahead, covering topics like agentic AI in fintech, corporate fraud prevention, cybersecurity, workforce strategies, a regional spotlight on the Middle East and much more. Here is an excerpt:

Global workforce strategies for the financial sector

As financial institutions recalibrate their workforce strategies for 2026 and beyond, they face a rapidly shifting regulatory terrain shaped by geopolitical tensions, technological disruption and evolving societal expectations. 2025 has seen a marked acceleration in legal reforms and policy shifts across jurisdictions, with four key themes emerging at the forefront of employment and compliance planning. These trends are not isolated – they are interconnected, and they demand a proactive, globally attuned approach to workforce governance.

The Shifting DEI Landscape

While institutional diversity, equity and inclusion (DEI) programs and practices have been subject to more legal scrutiny in the US this year, other regions—particularly EMEA and parts of Asia—are deepening commitments and expanding regulatory requirements. Major US-based financial institutions have scaled back public commitments to DEI, rebranding or removing references to diversity figures and programs in corporate filings, amid heightened political scrutiny under the current US administration. In contrast, many financial institutions across EMEA remain committed to robust DEI frameworks. For example, the UK’s financial regulators have proposed regulatory standards to embed diversity and inclusion into governance structures. And in South Africa, financial and insurance activities is a sector specifically identified under new affirmative action targets now in force. This divergence underscores the need for multinational financial institutions to carefully navigate DEI policy and goals with regional nuance, balancing local regulatory pressures with global values and workforce expectations.

Employers, including those in the financial sector, are under pressure (from both employees and government authorities) to increase transparency, particularly on workforce composition and compensation. In Brazil, for example, equal pay enforcement has intensified, with hundreds of companies inspected in the last year. Some of the significant changes include the US, where certain states, including California, require gender pay reporting, and shareholder activism is driving pay equity disclosures. In the EU, the Pay Transparency Directive requires member states to implement legislation by June 2026, with gender pay gap reporting starting in June 2027. Key requirements include: mandatory pay range disclosure; banning salary history questions; and employee rights to pay information with an increased role overall for worker representatives.Continue Reading What’s On the Radar for Financial Institutions in 2026?

In 2025, multinational giants across industries are redefining the scale and scope of global workforce reductions—with some cutting tens of thousands of jobs at a time in particular divisions, shuttering certain factories worldwide, moving to different countries, or otherwise undertaking large-scale restructuring—and this trend is likely to press on. Indeed, the World Economic Forum’s Chief People Officers Outlook – September 2025 shows 42% expect continued turbulence in the year ahead. These sweeping moves, driven by AI disruption, economic recalibration, and strategic realignment, underscore the urgent need for legally sound, jurisdiction-sensitive approaches to reductions in force.  

Headcount reductions can be achieved using a variety of different mechanisms ranging from performance-based terminations, redundancy-based layoffs, location-based closures or other indirect strategies like attrition management, voluntary separation programs, and early retirement incentives. No matter the approach or structure for implementing a global reduction in headcount, executing a major business change while mitigating legal exposure requires a nuanced understanding of local employment laws, cultural expectations, justification requirements, local regulations impacting the treatment of equity awards, as well as potential immigration and visa implications. Missteps during the planning or execution stage can trigger material employment claims, unexpected and substantial financial and operational costs, regulatory fines, operational disruption and reputational damage.

Fortunately, there are tried and true methods to avoid most unintended effects and unwanted outcomes. Here we provide 10 practical planning tips for building your strategy when the company seeks to reduce its headcount through a global reduction in force (RIF).

The Economic Backdrop: A Mixed Outlook

Even with the uptick in layoffs, the global economy in 2025 is showing signs of resilience, with the International Monetary Fund projecting 3.0% growth this year and 3.1% in 2026. However, this modest optimism is tempered by persistent inflation, geopolitical tensions, and a surge in protectionist trade policies. According to the World Economic Forum’s Future of Jobs Report 2025, slower growth is expected to displace 1.6 million jobs globally by 2030, with automation and digital transformation accelerating the shift.

In this climate, in-house legal counsel must be proactive in managing employment risks associated with cost-cutting, restructuring, and reductions in force.

Strategic Planning Tips for Your Global RIF Playbook

1. Level-set with key business stakeholders—communicate the jurisdictional complexity of a RIF involving multiple jurisdictions.

Employment protections vary widely around the world. While at-will employment in the United States allows for relatively straightforward terminations (barring union involvement or statutory notice requirements), most jurisdictions around the world (including the majority of Europe, as well as Canada, Australia and Japan) provide mandatory protections against dismissal, which often include articulating a legally justified reason for the RIF as well as taking additional procedural steps before employees are impacted. When constructing plans for a global RIF, it’s helpful to be clear with business leaders who are not employment counsel that it’s essential to build alternate timelines and costs based on jurisdiction-specific requirements.

Along these lines, engaging with local counsel early to navigate procedural nuances is key. This helps mitigate the risk of unforeseen complications, such as delays due to mandatory consultation periods, unexpected severance obligations, or exposure to legal claims arising from non-compliance with jurisdiction-specific requirements. Timescales and costs for RIFs are likely to increase as a result of legislative changes in 2026, underscoring the importance of checking local requirements early on.

2. Pressure-test the business justification for the RIF.

The starting point for analyzing reductions-in-force is understanding the legal threshold for a justified reduction (e.g., in Japan, there must be a strong economic justification for redundancies). Only very few international jurisdictions (e.g., Singapore and Switzerland) do not require employers to show specific grounds or justification for termination.Continue Reading Cutting Costs Without Cutting Corners: 10 Practical Tips for Managing Legal Risk in Global Reductions in Force

With nearly two-thirds of U.S. companies mandating formal return-to-work policies, employers may face challenges in enforcing RTO practices. Multinational employers should be aware of five key considerations and practical solutions to avoid potential roadblocks.

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Original article published in Law360.

In June, we offered our annual Global Employment Law webinar series sharing expert insights on the business climate in major markets around the world for US multinational employers. Baker McKenzie attorneys from over 20 jurisdictions outlined the key new employment law developments and trends that multinationals need to know in four 60-minute sessions.

ICYMI: click below to hear updates for the Americas, Asia Pacific, Europe and the Middle East and Africa and contact a member of our team for a deeper dive on any of the information discussed.

Session 1: The Americas 

Presenters: Andrew Shaw, Clarissa Lehmen*, Daniela Liévano Bahamón, Benjamin Ho, Liliana Hernandez-Salgado and Matías Gabriel Herrero

Click here to watch the video.

*Trench Rossi Watanabe and Baker McKenzie have executed a strategic cooperation agreement for consulting on foreign law.

Continue Reading Summer Replay: Tune In To Our Global Employment Law Update Series (Recordings Linked!)

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We are pleased to share with you The Global Employer – Global Immigration & Mobility Quarterly Update, a collection of key updates from Brazil, China, Italy, South Africa, Spain, the United Kingdom, and more.

Click here to view.

Special thanks to Celeste Ang and Stephen Ratcliffe.

We launched the seventh annual edition of The Year Ahead: Global Disputes Forecast, a research-based thought leadership surveying 600 senior legal and risk leaders from large organizations around the world and highlights key issues we anticipate to be crucial for disputes for this year.

In this episode, Blair Robinson (Partner, New York) and Lorren Martin (Senior Associate, London) discuss how financial institutions are navigating issues around IDE on both sides of the Atlantic and globally, with Rachel Farr, Senior Knowledge Lawyer.

Click here to tune in.


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