London finance firms seen cutting 25,000 jobs in 2012

Jobs in London’s finance sector will slump to their lowest level for 16 years as the euro zone crisis is predicted to cause over 25,000 layoffs in 2012.

By (Reuters)

Published: Wed 9 May 2012, 3:49 PM

Last updated: Tue 7 Apr 2015, 12:25 PM

That would push the number of jobs lost in the City of London since the top of the financial boom in 2007 to 100,000, the Centre for Economics and Business Research (CEBR) said.

The economics consultancy revised its forecast for the average number of London finance jobs for 2012 down to 255,000, the lowest level since the first quarter of 1996, from a prediction of 288,000 made six months ago. Many of the forecast additional layoffs have already taken place, it said.

Its analysis showed there were an average of 280,350 financial services jobs in London in 2011.

Additional cuts were down to the impact of the euro zone crisis on banks, despite interventions in the past few months by the European Central Bank (ECB) to provide easy cash to lenders, the CEBR said.

Lenders were hit hard last year by euro zone troubles, which dented trading revenues, while regulations are also squeezing profits and causing firms to cut staff. Major banks in the United States, Europe and Asia announced plans for more than 130,000 job cuts last year, according to a Reuters tally.

ECB actions were slowly filtering through to the banking system, however, and could help stabilize the City of London job market from 2013, when the CEBR is forecasting a modest recovery.

It said London finance jobs may rise to 268,000 by 2016 - still well below staffing levels of the last decade.

“London remains the top ranked financial centre but its lead has narrowed,” said Douglas McWilliams, CEBR chief executive, adding the gap was closing due to a combination of weak demand, regulation, high taxation and the competitiveness of Eastern financial centres.

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