Major Banks Cut 160,000 Jobs -- More Layoffs To Come, Report Says

UBS job cuts

Major banks have announced some 160,000 job cuts since early last year and with more layoffs to come as the industry restructures, many will leave the shrinking sector for good as redundancies outpace new hires by roughly 2 to 1.

A Reuters analysis of job cuts announced by 29 major banks showed the layoffs were much bigger in Europe than in Asia or the United States. That is a particular blow to Britain where the finance industry makes up roughly 10 percent of the economy.

The tally of nearly 160,000 job cut plans, meanwhile, is likely to be a conservative estimate as smaller banks and brokers are also cutting staff or shutting up shop, and bigger banks have not always disclosed target numbers of layoffs.

The tally also does not include reports of 6,000 job cuts to come at Commerzbank, for example, which the German group would not confirm last week.

More: UBS To Cut 10,000 Jobs, Workers Irate

Well-paid investment bankers are bearing the brunt of cost cuts as deals dry up and trading income falls. That is particularly the case in some activities such as stock trading, where low volumes and thin margins are squeezing banks.

"When I let go tons of people in cash equities this year, I knew most would be finished in this business. It is pretty dead. Some will just have to find something completely different to do," said one top executive at an international bank in London, on condition of anonymity.

The job cuts eat into tax revenues usually reaped from the sector at a time when the global economic recovery is slowing.

This year's tax income from the industry in Britain could drop to around 40 billion pounds ($63 billion) this year, compared to 70 billion in 2007/08, when the financial crisis hit, the Centre for Economics and Business Research (CEBR) think-tank said this week.

The job cuts announced since the beginning of 2011 come on top of job cuts already carried since 2009.

More: Bank Of America To Cut 16,000 Jobs By Year's End, Report Says

Of the 29 banks, from Europe's biggest bank HSBC to U.S. investment bank Morgan Stanley, just over 83,700 net jobs have been lost since 2009, with 167,200 jobs axed and 83,500 created.

Squeezed by regulations forcing banks to store up more capital in their trading businesses, firms are likely to shrink their investment banking units even further, as they overhaul their models to survive.

"It is structural as well as in response to cycles in the market. The market is still over-broked," said Zaheer Ebrahim at recruiters Kennedy Group.

Swiss bank UBS last month outlined a further 10,000 layoffs after announcing a plan for 3,500 job cuts last year. It said in October it had decided to exit most of its rates and debt trading units.

Workers in retail banking operation will not be immune to job cuts either, particularly in slowing European economies. In France for instance, bank executives predict retail revenues will falter.

"There are still 300,000 too many full-time employees in the top financial services players in Europe," said Caio Gilberti from the financial services practice of consultancy AlixPartners. Gilberti said cutting those jobs could lop just over 20 billion euros off banks' collective cost base.

Leaving For Good

As banks shrink, fewer of those leaving are able to find equivalent jobs at rivals, head-hunters and bankers said, and only a small proportion of those are qualified to move into other jobs at hedge funds, for instance, which look for specialized, skilled traders.

Mergers and acquisition dealmakers are now also coming under pressure, with fees in that area down 21 percent worldwide to $13.9 billion in the first nine months, Thomson Reuters data showed.

More senior investment bankers are among those in the line of fire. Those ranking as managing directors, who can command base salaries of around 350,000 pounds ($556,000), are becoming costly to keep -- and difficult to take on.

"At MD level, it is tougher to accept smaller jobs, and they do not have the same drive and ambition as the young bankers who have just graduated," Ebrahim from the Kennedy Group said.

Many of those that have enjoyed lucrative careers in the fatter years are instead leaving big banks for good, setting up their own small consultancies or different types of businesses.

Daily Digit: Banking Jobs Lost Since Last Year

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December 07 2012 at 4:51 PM Report abuse +1 rate up rate down Reply
In My Opinion Only

Obama and giant business CEO's also the executives' fault! A unexpected war is coming up at these people in due time. They asked for it.

November 19 2012 at 6:11 AM Report abuse +1 rate up rate down Reply

CEO outrageous bonus based on PROFITS,employees take the fall.

November 18 2012 at 11:02 PM Report abuse +1 rate up rate down Reply

what a coincidence this "report" comes out after the election--not before.

November 18 2012 at 11:00 PM Report abuse +2 rate up rate down Reply

Owning a home is the AMERICAN DREAM !! To lay the blame for the banks failure at the feet of those who were DUPED into buying that american dream is flat out bullcrap.. bankers SAT OUT TO SELL THEN REPOSSESS, to increase their hugh profits...It backfired on them this time and they got stuck with the repossessed property !!!
When americans STOP idolizing those who are rich..instead of giving the working man the credit for building this great country...we will all be better off financially....this country will be better off!!........Tell it like it is instead...........when big business lays-off their's because they overhired in the first place and those workers are not needed anymore.........

November 18 2012 at 8:27 PM Report abuse rate up rate down Reply

unfortunately they'd have to just about close up shop entirely before the b a s t a r d s who did their part in crushing the economy would lose their jobs.

November 18 2012 at 8:23 PM Report abuse -1 rate up rate down Reply

There were too many bankers already selling mortgages that people could not afford. Here are industries that added jobs last year.
Construction +46,000
Transportation and Warehouse +67,000
Education +76,300
Wholesale +84,400
Mining and Logging +91,000
Administration and Waste Services +179,500
Durable Goods Manufacturing +239,000
Professional and Technical +246,000
Accomodation and Food Services +273,700
Health Care +350,300

November 18 2012 at 3:44 PM Report abuse +1 rate up rate down Reply
3 replies to abcadams1's comment

Thank Obama and Dodd Frank...a very, very bad law that needs overhauled if not repealed.

November 18 2012 at 3:07 PM Report abuse rate up rate down Reply

Don't tell the libs--------They were expecting alot of gifts from SANTABAMA this Christmas. MERRY CHRISTMAS.

November 18 2012 at 10:55 AM Report abuse +3 rate up rate down Reply
1 reply to rmweld's comment

They'll get it one way or another. Taking it from your pocket to theirs. Pelosi and Obama at the lead.

November 18 2012 at 7:59 PM Report abuse +5 rate up rate down Reply

As Obama said, "elections have consequences" We tried to tell you but you voted Obama in anyway. Business people do not trust Obama, period. It is for good reason. I was getting ready to expand but I am not sure now and I am sure every business person feels the same way. He and his supporters hate business and all corporations which increases the risk level on investments quite a bit. Most of us saw this coming and I am sorry that you did not.

November 17 2012 at 12:08 PM Report abuse +5 rate up rate down Reply

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