Westpac chief executive Gail Kelly has announced job cuts, which are designed to maintain earnings in the face of a slowing economy and lower credit growth. And it seems that her cautious headcount/recruitment strategy is becoming the new norm for Australian banks.

The firm has not revealed exact numbers, but media reports and recruiters we’ve spoken to expect the layoffs to total more than 1000. Middle management and IT positions at the bank’s head office in Sydney are likely to be affected the most.

“It’s pretty usual for middle management to be one of the first to go, and Westpac has had massive teams running various projects, so it wouldn’t surprise me if there is room to downsize in IT,” says one recruiter, who chose to remain anonymous.

Although the firm is growing its Bank of Melbourne subsidiary, Mrs Kelly predicts Westpac’s overall headcount will fall this year and next. Westpac cut about 600 jobs, mostly in finance technology, in the half year to March.

Meanwhile, there is more talk about off shoring to Asia. At Westpac, 60 jobs look likely to go in Sydney and up to 40 in Adelaide. ANZ – which already employs 4,500 IT and back-office workers in Bangalore – is set to move about 20 positions out of Australia, according to press reports.

The current reporting season has seen healthy profits at Australian banks, but the expectation of leaner times ahead is causing a cautious recruitment outlook. “From what I hear, Westpac is on an official hiring freeze,” says a Sydney headhunter who asked not to be named.

He adds that Westpac isn’t the only firm reviewing its headcount, and that IT jobs aren’t the only ones in jeopardy. “CBA’s risk division of 300 people has cut 83. This is pretty unusual as risk and compliance is usually the last place to be trimmed. Apparently it over hired – that’s the internal rumour.”