Financial-services firms are on track to cut the most jobs in January since the start of 2009 as Europe struggles to emerge from the debt crisis and regulators impose tougher capital rules.
The 16,040 announced and expected reductions in the past three weeks are just short of the 16,389 cuts made in the industry during January 2009 after Lehman Brothers Holdings Inc. collapsed, according to data compiled by Bloomberg. Bankers and consultants expect the cuts to accelerate in coming months even as financial stocks gained 26% last year.
'We’re moving into a phase of radical restructuring', Chris Harvey, global head of financial services at Deloitte LLP, said in an interview at the World Economic Forum in Davos, Switzerland. 'If you take the scenario the universal bank model is gone, then you have to go down the restructuring route and with that come job cuts. We’re about halfway through'.
European firms such as Barclays Plc (BARC), based in London’s Canary Wharf, and UBS (UBSN) AG are eliminating employees at a faster pace than most of their U.S. counterparts amid the sovereign-debt crisis. The region is grappling with a weakened euro-area economy, increased policing of banker compensation and regulatory pressure on firms to shrink quickly.
Hit the link below to access the complete Bloomberg article: