London Financial Jobs to Fall to 20-Year Low, Study Finds
Employment in London’s financial- services industry may tumble to a 20-year low in 2013 as a slump in equity and foreign-exchange trading and mergers triggers job losses.
Positions in the City and Canary Wharf financial districts may fall to a revised estimate of 237,000 in 2013, compared with 256,000 predicted six months ago, the London-based Centre for Economics and Business Research said in a statement today. That would be the lowest number since 1993 and down from 354,000 in 2007, the research firm said.
“The business model for many firms in the City, which was based on taking a percentage from yields of 8 percent plus, has to change in a world where low yields are likely for many years to come,” Douglas McWilliams, CEBR chief executive officer, said in the statement. “The fall in activity is partly a function of the weak economy, partly a hangover effect from the financial crisis and partly caused by increasing regulation.”
European and Japanese financial firms, with securities trading hubs in London, are cutting positions amid volatile markets and increased regulation in the U.K. UBS AG (UBSN) plans to cut 10,000 jobs as Switzerland’s largest lender shrinks its investment bank. About 100 traders at its fixed-income unit in London were put on leave, a person briefed on the plan said last month.
Nomura Holdings Inc. (8604), Japan’s biggest brokerage, is also eliminating about 100 investment-banking jobs in Europe as it unwinds a four-year international expansion, three people with knowledge of the plans said in September. Royal Bank of Scotland Group Plc, 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.
The decline in City jobs reflects a 20 percent fall in equity trading this year compared with a year-earlier and a 50 percent fall in international orders for equity trading. U.K. mergers have dropped by a third, while international deal-making has declined more steeply, the CEBR said.
To contact the editor responsible for this story: Edward Evans at firstname.lastname@example.org