Financial job losses in western Europe surpassed 30,000 this year as firms including Royal Bank of Scotland Group Plc and UBS AG cut positions amid the sovereign debt crisis.
While the 33,437 reductions are less than half of the 76,654 made in region during the same period a year ago, analysts expect the cuts to increase. Financial firms have announced more than 60,000 cuts globally so far this year, data compiled by Bloomberg Industries show.
“Last year’s cuts were designed to deal with the new market paradigm,” said Christopher Wheeler, a London-based analyst at Mediobanca SpA. “This year’s cuts show how much deeper the banks have had to go. Job losses will continue through year-end as banks focus on costs rather than revenues, given the current environment.”
Firms in the City and Canary Wharf, London’s financial districts, and lenders across Europe are eliminating more employees as the sovereign debt crisis triggers a slump in trading, stock and bond offerings. The 17-country euro area economy will contract 0.4 percent this year, and grow 0.2 percent in 2013, less than the 0.7 percent predicted three months ago, the International Monetary Fund said today.
“Some banks might expect, and others hope, that the world economy will pick up again next year,” said Tom Kirchmaier, a fellow in the financial-markets group at the London School of Economics. “In reality, much will depend on how the markets will be fairing in the coming years to determine whether the pain is behind, or in fact still ahead of us.”
RBS, Britain’s biggest government-owned lender, said on Sept. 24 it will cut 300 more jobs at its investment banking unit in addition to 3,500 announced in January. UBS AG, Switzerland’s biggest bank, plans to cut about 80 to 90 positions in its European investment-banking division as part of a global revamp, two people with knowledge of the matter said last month.
Nomura Holdings Inc., Japan’s biggest brokerage, is eliminating about 100 investment banking jobs in Europe as it unwinds a four-year-old international expansion, three people with knowledge of the plans said in September. Julius Baer Group Ltd., the Swiss private bank established in 1890, may cut more than 1,000 jobs as it combines Bank of America Corp.’s non-U.S. Merrill Lynch wealth units.
Financial firms “still require massive cuts,” said Jason Kennedy, chief executive officer of Kennedy Group, a recruiting firm.
European banks making the biggest cuts this year include Banca Monte dei Paschi di Siena SpA, which is eliminating 4,600 jobs as part of a reorganization. Deutsche Bank AG said in July it will also cut about 1,900 jobs “predominantly” outside of Germany, including 1,500 positions at its investment bank and related infrastructure areas.