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Bloody day in the City: 1,300 jobs axed
Simon English and Nick Goodway18.04.08
The City bloodbath began today as two financial giants axed 1,300 jobs.
Bankers suffering in the credit crunch were also prepared for the figure to double tomorrow.
UBS announced it would cut 900 staff at its Liverpool Street headquarters by June and Merrill Lynch said it would shed 4,000 jobs worldwide. Sources said that up to 400 of its 4,500 London staff would go.
Employees of Citigroup, the world's biggest bank, are now preparing for the axe as sources said it was likely to lay off 1,000 London staff when its first quarter results are published tomorrow. The cuts are the first confirmation of the scale of the job losses facing the City, estimated this week at 40,000 by JP Morgan - more than one in 10 of all workers.
It will fuel mounting fears of a recession, led by a City downturn. Commentator David Buik of BGC Partners said: "The job cuts were inevitable and more banks will follow suit, starting with Citigroup tomorrow.
"Merrill's figures were worse than expected. People are now immune to the numbers because they know there is worse to come."
Chancellor Alistair Darling was today finalising details of a package aimed at averting the threat of a downturn by unblocking the money markets.
The key plank of the plan is an attempt to tackle the freeze in interbank lending by accepting mortgage-backed securities in exchange for government-backed bonds.
The move, if successful, would allow banks to borrow money from each other more easily, opening the way for the deals, on which the City depends, getting back on track.
Reader views (13)
Who is funding all this redevelopment in the Square Mile, then? If it is a grant in order to impress visitors to the London Olympics we'll be bankrupt well before they begin.
- Peter Seekings-Foster, Muildenhall, Suffolk
Excellent news!
People have criticised the City for saying that they are an economy on their own and do not need the rest of the UK. Now they will be able to prove that they really are able to absorb this and prosper.
I think this is the excellent challenge that I am sure they have been looking for. I don't think they will miss 40000 or 80000 job losses the yare so important!
- Austin Tassletine, South West, UK
Sorry if I laugh. These bankers caused this mess by their stupidity and ego-driven greed. I don't think too many other people will shed a tear for any of them.
- John Austin, London England
The City is Gordon Brown's Cash-Cow.
It produces at least 20% of the UK tax revenues which Gordon Brown then swipes and generously distributes to labour voting regions mostly in the North which cannot pay their way. He also takes it to benefit Scotland (even North Sea Oil revenues do not make up for all the money they get from England)
Where will Almighty Gord get his money from? He needs it to waste.
- David, Crawley UK
Can we add Gordon Brown and Alistair Darling to the ranks of the unemployed too?
- Ian, London
Pity the electorate can't lay governments off when there's a downturn. If so, our Sub-Prime Minister would have got his P45 months ago.
- C, London, UK
The hidden costs of recession will be a huge impact on emotional health which causes physical and mental health problems. Where will these one in ten people be able to express their feelings and gain support? We have numerous people online who are suffering deeply from the loss of their work and the decline in confidence, social status and self esteem that invariably follow. The market is not a good regulator of feelings!
- Jenny Hyatt, London, UK
Live by the sword, die by the sword...
- Mark, London
Employment in the city reflects the boom and bust nature of how their marketplace has developed. The one thing the city cannot handle is stability. It will always be thus!
- Bruce Page, London
Employment in the City unfortunately reflects the boom and bust nature of their marketplace. The one thing the city cannot handle is stability!
- Bruce Page, London
Why should the taxpayer subsidise the greedy banks who have risked their shareholders money on speculative gambles? If there are fewer mortgages available then so be it - many people can remember having to wait for months to get a mortgage. If some banking jobs go that is the reality of living in a market economy. To bail out the banks for irresponsible lending is yet a further waste of taxpayers money by the increasingly incompetent Alistair Darling.
- Bethany Griffiths, London
Only 1,300? That seems a bit light to me. Having said that it is only two companies!
- Fraser, Telford Park
Brown and Darling's incompetence is breathtaking! Why did they not act sooner. As with Northern Rock, they dithered and now they come up with a package too late; after panic has set in and gathering momentum.
Those who are hoping for a property crash may find that being unemployed is not a good place to start when looking for a mortgage.
- Beatriz, London
