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‘Bloodbath’ as banks set to axe 350,000 jobs
Bill Condie21 Nov 2008
The global financial services industry faces an even bigger bloodbath than previously anticipated with job cuts now expected to hit 350,000.
That is double the number of people who have already lost their jobs since the financial crisis led to frozen credit markets.
Banks are slashing back staff numbers around the world amid trillions of dollars in losses.
Executive search firm CTPartners says the job losses will amount to some 20% of the global workforce before the financial crisis hit.
"This is the financial equivalent of World War Two," Brian Sullivan, chief executive of CTPartners, told Bloom-berg. "It's unprecedented. You're seeing a seismic shift in the population of banking."
Sullivan says that his firm is shifting its focus from banking to industries such as pharmaceuticals and clean energy as demand for finance professionals dries up.
He claimed that the meltdown would set the financial services industry back decades.
"Without the massive leverage that's been in the system, the business of some of these big investment banks simply isn't going to be there," he said. "You'll go back to theinvestment banks of the 1960s and 70s."
The new climate will be unlikely to lead to a return of Wall Street's swashbuckling days as Goldman Sachs and Morgan Stanley have converted themselves into banks and are therefore unable to take the same risks as before.
Sullivan says their profitability will inevitably take a hit.
He says a reduction in big trading bets is particularly bad for the mathematical engineers, so-called "quants", who designed the exotic derivatives that have driven the market over a cliff.
Their skills at devising computer-driven trading strategies allowed them to write their own pay cheques before the crisis but now Sullivan says jobs in the field will be hard to find.
Citigroup this week became the latest to announce swingeing cuts in its workforce. The embattled global lender will cut 52,000 jobs in the next year after losing almost $20 billion (£13.49 billion) in the past four quarters.
Meanwhile, JPMorgan Chase is this week considering another 10% cut in its investment banking staff - about 3000 jobs - and Bank of New York Mellon said it plans to axe about 4% of its workforce, or 1800 people.
Deutsche Bank will shed about 900 jobs in its global markets division, mostly in London and New York.
Reader views (8)
Being an Australian who worked 12 years in the city of London, i'm glad I am out of the place and living a great life here. I reckon it's going to be a hell of a lot worse in London than here. Oh, and please don't thing we all have the same writing skills as Jagdish!
- James, Melbourne, Australia, 24/11/2008 02:25
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Go back to London then Jagdish. you won't be missed. Australia does not need quitters.
- Jeff, Hobart, Australia, 24/11/2008 00:10
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You would need a heart of stone not to burst out laughing.
- Richard, London, London. UK, 21/11/2008 14:58
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Perhaps the "quants" who will be made redundant will be able to devote their undoubted mathematical talent to more useful ventures. How about filling the gap in maths teachers in our 3rd rate state schools? In a way there is a sort of justice here. They created exotic financial instruments which ultimately destroyed the market. It would have been better if they had been talented artists and had never crossed the portals of our financial institutions. There is one thing you can guarantee, however: few of the senior executives who nodded through these transactions (if only because they were ashamed to admit they couldn't understand how they worked) will be strolling down to the Job Centre. The main blow will be struck at junior staff who had little part in this debacle.
- Peter, Pirot, Serbia, 21/11/2008 14:22
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If Jagdish thinks worser is a word then I dont rate his job prospects very highly be it in the UK or in Australia. If Brian Sullivan is right and this is "World War II", I expect that londoners will exhibit the same spirit as they did during the tough times of the blitz.
- Dave, Hamilton Bermuda, 21/11/2008 13:57
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The High Street banks will be the first to recover from the downturn after cutting their costs and increasing their margins. But it will take some while.
- Mike Newland, London, 21/11/2008 13:14
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I have emigrated from UK an year ago. The sad story about eminent recession is far worse in Australia than in England.
May be I made a wrong move. I did rather be in UK and face the music than in Australia where job prospects are far worser than UK. The media in Australia likes to bleat about things and things are for worse than then media potrays.
I miss good old England and would rather face the music in London than ausi land.
- Jagdish, Beechborough Australia, 21/11/2008 11:20
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Masters of the Universe will now be Masters of the Job Centre, chuckle...
- Skeletor, London, 21/11/2008 11:11
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