City of London jobs are still in decline
The number of "approved" staff working in the financial services industry has fallen to just under 152,000, the lowest since 2004.
Analysis of the Financial Service Authority's database by corporate finance boutique IMAS, shows that people employed in frontline jobs by banks have fallen by nearly 20,000 since the financial crisis from a peak of about 170,000 in mid-2007.
The collapse of City job numbers shows no signs of slowing and is likely to accelerate, according to separate research from Deutsche Bank, which warned that investment banks could cull up to 7 per cent of their staff this year.
Deutsche Bank said it was "conservatively" estimating a 25 per cent peak-to-trough reduction in staff numbers and that the cuts seen so far were just the start of a more severe reduction in staff numbers.
"Most cost-cutting in the last 18 months has been shedding headcount added in the mini-bull market of late 2009 and early 2010. Only in [the second half of last year] has true cost reduction gathered momentum," said the bank.
City headhunters say the cull in frontline jobs is likely to come hand-in-hand with far lower bonuses for most staff. Veni Partners, a recruitment firm, estimates bonuses will be down 30 per cent on last year and the message from banks to staff was that "this year, your job is your bonus".
With lower bonuses and job cuts on the horizon, an increasing number of bankers are opting to leave the City and start their own consultancy or take jobs in the corporate sector, often working for former clients.
Frequently Asked Questions about this Article…
Frontline banking jobs in the City of London have fallen to an eight-year low. Analysis shows a steady decline in approved frontline staff, with the number now well below recent peaks.
The number of 'approved' staff in the financial services industry has fallen to just under 152,000 — the lowest level since 2004, according to analysis of the Financial Services Authority database.
Frontline jobs at banks have fallen by nearly 20,000 since the mid-2007 peak of about 170,000, based on IMAS analysis of FSA data.
Yes. Separate research from Deutsche Bank warned cuts could remove up to 7% of investment bank staff this year, and the bank said a 25% peak-to-trough reduction in staff numbers was a conservative estimate.
Banks are cutting costs by shedding headcount that was added during the mini-bull market of late 2009 and early 2010. Deutsche Bank noted true cost reduction gathered momentum in the second half of last year, leading to accelerated job cuts.
City headhunters expect much lower bonuses alongside job cuts. Recruitment firm Veni Partners estimates bonuses will be down about 30% on last year, and banks have signaled the message: "this year, your job is your bonus."
Many bankers are leaving to set up their own consultancies or to take roles in the corporate sector, often working for former clients rather than staying in traditional front-office bank roles.
Investors should keep an eye on bank announcements about staffing and cost-cutting, trends in bonus pools, and research from firms like Deutsche Bank and IMAS. Those signals can indicate the scale of restructuring and potential impacts on bank profits and the wider financial sector.
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