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40,000 to face City jobs axe
Simon English, City Correspondent15.04.08
Up to 40,000 City jobs could be axed as banks and stockbrokers deal with one of the worst financial crises in decades.
It is twice the figure first feared and amounts to one in 10 jobs in London's financial district.
With business in the Square Mile and Canary Wharf slowing to a halt at some firms, traders, bankers and support staff are all regarded as being at risk.
Gordon Brown met bankers today as the City battles with the global credit crunch and the fall-out from the US sub-prime mortgage debacle.
The warning of 40,000 jobs at risk comes from an internal report for JP Morgan.
The leading US investment bank began back-tracking once the number leaked, insisting it was not an official report intended for publication. But it indicates City insiders expect the turmoil in financial markets to get worse.
The Centre for Economics and Business Research recently guessed that City job losses would reach 19,200. JP Morgan's analysts say this is far too optimistic.
If JP Morgan is right, the shake-out will be even more severe than the one that followed the bursting of the dotcom bubble in 2001. The new figure also suggests the days of multi-million-pound bonuses are over for the next few years.
Smaller stockbroking firms have been quietly laying off staff for months. The bigger players could make announcements within the next few months.
One effect of the job cuts will be a plunge in property rents as office space empties. House prices in London and surrounding areas are also likely to fall yet further.
Reader views (5)
City of London should not be immune to the impacts of the global financial meltdown. Some of the firms are overstaffed and over manned. Does the City want the government to intervene, especially nationalising the losses of companies in difficulty. When companies were making obscene profits, they were happy to pocket such money. This is the world of market forces where firms must accept both losses and profits.
- Philippa, London, UK
My heart bleeds!
- Jimbob, Kensington
I'm work the industry and I can tell you this report is a huge overstatement. Yes, times have changed and banks will use the opportunity to get rid of deadwood (40k is a third of Canary Wharf - come on people). Keep in mind that JP Morgan are a bank so would profit from putting the frighteners on smaller finance houses with these types of reports.
- Andrew, London
But Crash Gordon said that all was fine there is no financial crisis?!
- Jacqueline, Hampstead, London
Having recently predicted over 37,000 terminations a few days ago, I must now revise my prediction to approximately 53,987 for the full calendar year (Jan-Dec inc.) 2008.
... And that's just for the financial district! Disbelievers in the effects of the Credit Crunch please beware!
Apologies for any earlier confusion.
- Fraser, Telford Park
