It seems fairly certain that we are in the early stages of what will be a significant jobs shake-out in the City. It has been coming.
There is only so long that employers can justify holding on to six — or seven — figure-earning bankers when business stops coming through the door. The offices and trading floors of many City firms must have been miserable places last year as the IPO and M&A droughts stretched on for long months and the stock market did little better than tread water.
Now they will be quieter ones too.
UBS were not putting precise numbers on the scale of their post-Credit Suisse merger job cuts, but you do not need a quantum computer to work out the likely scenario. If you assume an average employee overhead of say $200,000, that $13 billion cost saving target works out at tens of thousands of jobs. There will be other ways of saving money of course, but global banks are like football clubs, a disproportionate percentage of the cost base is simply paying the talent. The two banks had around 11,000 souls in London premerger.
That number will come down markedly. Job postings have been weak since the start of the year and it is fair to say this is probably not a great time for an out-of-work M&A specialist to be doing the rounds of the recruitment firms.
Yet the number of “City-type” jobs in the Square Mile and Canary Wharf is higher than ever, the feared exodus to Frankfurt and Paris has not really taken off, and new skyscrapers are rapidly filling up. In truth the City jobs marketplace has changed out of all recognition.
Those traditional suit-and-red-braces financial services jobs that have fuelled London’s growth since Big Bang are in long-term decline.
Tech, life sciences and, inevitably, legal and regulatory services, are in the ascendant. The P45s will be flying around EC1, EC2 and E14 this year but the shake-out is unlikely to harm London’s long-term prospects. As ever, it is evolving.
