London firms to axe 13,000 jobs in 2013
London, November 6, 2012
London's financial sector will lay off 13,000 staff in 2013 after a weak year for dealmaking, a study forecast on Tuesday, slashing employment in one of the UK's key economic motors to its lowest since the early 1990s.
Financial firms in Europe's biggest financial centre have now laid off more than 100,000 employees since a market peak in 2007, driven by four years of crisis that have brought a wholesale reassessment of banks' role and business models.
Continuing cuts will bring job levels to a 20-year low in 2014, the Centre for Economics and Business Research (CEBR) predicted.
The Centre had previously expected banks and other financial firms to add around 6,000 jobs next year but it said it now expected a collapse in many business areas during 2012 and saw little chance of a big rise in activity in 2013.
"The models indicate at best stabilisation during 2013/14 and a gentle rise thereafter," CEBR said in its statement.
The financial sector adds up to a bit over 10 percent of the UK economy, more than construction or manufacturing, and is seen by most analysts as a crucial factor in the long-running economic boom that ended with the 2008 crisis.
Worries about the health of the euro zone kept equities trading volumes weak in 2012, hurting many of London's stockbrokers, while mergers and acquisitions in the UK have also slowed.
This has hit smaller firms as well as international banks with big bases in London, with Germany's Deutsche Bank among those cutting jobs in 2012, while Switzerland's UBS is set to shed a further 10,000 staff in the next few years, with London to be hit hard.
Tougher regulations on capital are also forcing more investment banks to shrink, as focus on different businesses. UBS for instance is exiting large parts of its fixed income unit, which uses up more capital than areas such as equities. – Reuters