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City bears the brunt in bloody week of job cuts
Nick Goodway and Joe Murphy14.11.08
LONDON bankers were facing a new wave of redundancies today as Britain headed for 20,000 job losses in five days.
Citigroup is to send redundancy notices to 10,000 workers worldwide, many in Canary Wharf, while Royal Bank of Scotland is to shed 3,000 investment bankers, including hundreds in the City, within a month.
In addition, Clydesdale and Yorkshire banks are to axe 350 jobs next year, the union Unite said today.
The scale of the cuts means 20,000 jobs have gone across the country since Monday as the economic downturn strengthens its grip and sends unemployment soaring.
In just a week some of the country's biggest names — including BT, Virgin Media, GlaxoSmithKline and Taylor Wimpey — have slashed jobs. The cuts have prompted predictions that unemployment will hit two million by Christmas and three million next year.
Not since the recessions of the early Eighties and Nineties have so many large-scale job cuts been announced in such a short space of time across such a wide range of industries.
Unemployment in Britain rose to 1.83 million this week, its highest level in the 11 years since Labour came to power.
Citigroup will start handing out redundancy notices staff mainly in its investment bank. The Wall Street and Canary Wharf-based bank has lost more than $20 billion in the past year. Managers have been ordered to cut departmental wage bills by at least 25 per cent.
Royal Bank of Scotland, which is being partly nationalised through a £20 billion government bail-out, is to make its job cuts over the next four weeks. They are all likely to come in its investment banking division, Global Markets.
The cull will see significant losses in the City. Many casualties are expected to be in what was ABN Amro, the Dutch bank which RBS took over shortly before the credit crunch. High Street operations including its NatWest offshoot are not expected to be affected but with RBS expected to make the first annual loss this year more jobs may be under threat. More banking job cuts are expected with Morgan Stanley due to lose 10 per cent of its worldwide workforce of 4,500. That could lead to about 250 jobs going at its Canary Wharf offices.
One City economist, who asked not to be named, warned the tide of job losses was only the beginning. “This is going to get much, much worse,” he said.
“Many financial markets are totally closed. If you have hundreds of people effectively sitting around doing nothing, they are going to get canned.”
He spoke as the Eurozone economy was declared to be in recession today. It's everywhere,” said another economist. “Wherever you look around the world, countries are either in recession or about to go into recession. The employment market will reflect that.”
Australia and New Zealand Banking group today confirmed that it plans to cut at least 500 jobs in management.
Northern Rock cut 1,300 jobs in August and the Lloyds TSB-HBOS merger, part of the Government's £37 billion bail-out, is expected to bring thousands of job losses. Computer and software giant Sun Microsystems, which has offices around the UK including two in the City and one in Camberley, Surrey. today announced 6,000 jobs will go worldwide.
New Star Asset Management has also announced 50 London job cuts. BT announced 10,000 job losses yesterday with up to 7,000 in the UK. Virgin Media is planning to shed 2,200 posts, yellow pages publisher Yell is cutting 1,300 jobs and housebuilder Taylor Wimpey is losing another 1,000.
Reader views (22)
The more city jobs that are lost, the higher I raise my champagne glass to these greedy ******** who screwed up the economy. I just hope enough of them get what they deserve. I have absolutely no sympathy for them at all. Now it is the rest of society that is burdened with the cost of their greed!
- Phil, London
It's a mess, peoples lives are going to be destroyed. We were all lulled into debt is good, who cares about tomorrow. Well tomorrow is here. Who's to blame? Cant help thinking that the Politicians who now claim they are 'solving the problem' were the arch villains, like Greenspan. Think history will name, names, but of course it will be too late by then. Reality check... its here, right now.
- Colin Bond, London
Unfortunately it seems the credit crunch´s a bit self made because they should have played it more safe at the US financial market - regulations are just now developed at several so-called G20 summits. You are a bit too late, aren´t you? By the way it´s clear that a successful economic cycle comes to an end - unfortunately they aren´t everlasting!
- Thebavarian, Bavaria/Germany
Sunmicrosystems has just announced the cutting of 6000 jobs - following an analyst report. Time for some analysts to go methinks. They seem to be intent in the Financial institutions to screw everyone else. Half the world is now Paying the price for the Mess, which continues to be generated and contributed to by such Financial Institutions.
Toni Sacconaghi, an analyst with Sanford Bernstein, wrote in a report on
Friday that Sun could raise operating margins by 7 percent and earnings by $1 a
share if it were willing to cut 20 percent of its workforce. Sun's actual
job-cutting plans fall just short of that figure.
- Mike, France
Dean's just another loser, end of story. Student overdraft ?? Pah, pay it off mate...being self employed's a mug's game. Just about to finish over 30 years in the City myself - mortage paid off, school fees behind me, and a nice final salary pension coming up. God bless the banks and the thousands we've made off fools like Dean. Off home in my Ferrari in a min...
- Richard, london, ENGLAND
Less schadenfreude please. Do not forget behind every person that loses his / her job there is someone suffering. And also do not forget the lost PAYE and NI payments the government is not collecting. This is a global problem. "Do not ask for whom it bell tolls, it (might) toll for thee" (with apologies to John Donne)
- Patricia, London
Yes, it very sad many people are loosing their jobs in the banking industry and I agree some where not in highly paid positions, although most get paid considerably more than I currently do. But Dean has a point and the banks recent behaviour as regards government buy-outs and still wanting to give bonuses to staff and dividends to share-holders show they are still don't understand their moral responsibilities to public at large. As for "investment bankers" etc. they are generally nothing but greedy, short-term company asset strippers with very little real interest in the products and services of companies they acquire and invest in.
- John David, London
"What is happening in the city will effect everyone in some way". If the overall effect of the job cull in the city means lower house prices in parts of London that were once affordable and less arrogant, overpaid yuppies from here there and everywhere poncing around London like they own the place, then roll the redundancies.
- Martin, London UK
If they don't hand out bonuses this year then maybe the banks can keep people in employment. The seven billion pounds estimated to be paid in bonuses should be able to keep people employed.
- Dennis, France
Obviously some City workers and Bank staff will have something to say about these comments - and yes, clearly, a lot of ordinary people have ordinary, averagely paid jobs in the City or the Banks and are not responsible for this financial chaos. However, it's no good pretending that the public are going to be particularly sympathetic to job losses in the financial sector or, that it can suddenly be turned around to be the fault of 'Joe Public'. If anyone knows the truth about how these banks were disastrously run, it's the people who worked for them - and, from the forums I've read, had a very stressful time doing things they didn't want to do.
Nothing is going to get better until we have people of integrity running the banks. So those people who know exactly how corrupt and unethical the organisations they worked for were, should be shouting from the roof tops about what they know. Otherwise, we're just going to have the same old foxes running the same old chicken coups and a lot of chickens will be hurt - including bank and City staff.
- Nikki, UK
Damian and Carl you are so right many of my mates who dont earn top wack have been laid off its also affecting other industries. Just hope it wont affect you Dean.
- Phil, London
Id imagine that most of the jobs going is just an attempt to shift dead wood now they have an excuse for it. If most of these jobs arent the high earners then how much will it actually save them.
I am in work thanks Carl but due to spending most of my life getting shafted by banks (being black listed for years due to a student overdraft, being self employed and not being able to get a mortgage and also pay huge amounts of tax for them to be bailed out) I have no sympathy for the fat cats or the people who work in the banks themselves, they all contribute to shafting the poor and making the rich richer.
- Dean, London
Just because jobs are going at banks, doesn't mean we're all bankers. I was made redundant in the last few days and work in IT. Comments such as "devil spawn" are simply immature, we're talking 10,000 PEOPLE (yes, genuine, hard-working, breathing people with families of their own) in one WEEK losing their jobs. This is terrible!
- E, London
Dean didn't say that all City workers were devils, he said they were devil's spawn. If the City gave a single thought to keeping the goose alive for every golden egg it scrambled and ate, spawn would still be gainfully employed and devil would still be in the detail.
- Bloke, London
If it were the ridiculous greedy monsters losing their jobs I would only have one thing to say: ha, ha, ha, ha. Unfortunately, as Carl states, it'l be all the people with real jobs and low salaries that suffer first. However, as long as the fat cats can't type, do their own reception work, and be their own PAs, then there is some hope that the people who actually DO something will get left behind.
- Real, London
Dean, it's probably worth noting that that the investment banks and other financial institutions you so vehemently hate pay around 35% of the nation's tax contributions, which ultimately goes to help those on benefits, schools, hosptials etc. around the country, not just in London. Without them, you might as well turn the lights off and shut the door behind you.... quite a niave view you take I think.
- Tom, London
"Investment Banking Devil spawn"
So I guess every one of the 300k people or so who work in the city are millionaire's, drive £150k Ferrari's, own Patek Philippe watches and were each collectively responsible for investing in Sub-prime, Alt-A, RMBS, and the other toxic derivatives?
No blame then whatsoever for Joe Bloggs who jumped on the housing band wagon, looking to make a quick buck, bought a house they couldn't afford on a self cert mortgage deal, bought a new car, took two foreign holidays a year, ate out twice a week in the latest designer clothes?
Happy to take on the one hand when credit was admittedly too cheap and blame others when it all falls down around them. Responsibility works both ways.
- Damian, London
Thanks for that Dean, your comments are just what we need. Not all bankers are the same, there are only a handful that earned mega amounts and still struggle to pay bills and mortgage. We are not all the devils spawn, what is happening in the city will affect everyone in some way.
- Maggie May, London
Dean, you seem to be very naive. You need to understand that it won't be many of the fat cat bosses or the very highly paid top brokers that will be going; it will be the secretaries, administrators, back room staff etc who in reality probably don't even earn an average London salary - also, try to remember that these people will have families and homes to support. I genuinely hope that (if you are even in work!) your industry suffers in the economic downturn and that you also lose your worthless job (whatever that may be...as it seems that we are able to make sweeping statements without any real thought behind them). Please try and be rational and show a degree of intelligence.
- Carl, London
And 8,000 people entering the Country each week. Thanks Calamity Brown.
- Roger, Staines
Don't forget that many UK banks have outsourced thousands of jobs to India. Is that good for the UK Employment figures? What does Gordon Brown have to say about that?
- Luciano Payne, Streatham Common
So the devils workers are finally being shipped out. Maybe they can apply for one of their reasonable loans they used to offer people such as the 31% APR one I got offered by RBS the other day to see them through their rocky period, maybe they can now spend their days spending vast amounts of time waiting in a bank to apply for it. ha ha ha. As for the investment banking devil spawn I can't even be bothered to waste my time typing anything...
- Dean, London
