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Thousands of London banking job cuts to start next week as contingency plans kick in

Banking job cuts London Brexit

Get ready to clear your desk

If you perchance thought that your London banking job would be safe with Britain outside the European Union, you were seemingly wrong. Consultants working for leading strategy firms in London say banks have activated their contingency plans and that the London job cuts are about to come thick and fast.

“You’re looking at anything from 50,000 to 70,000 London finance jobs being moved overseas in the next 12 months,” predicts one consultant working with one of the top finance strategy firms in the City. “Jobs are going to be cut, and those cuts are going to start next week.”

Campaigning organization, TheCityUK estimated that there were 729,000 finance and finance related jobs in London in 2015, of which 143,600 were in banking.

Jamie Dimon already sent a memo to J.P. Morgan staff in London saying that the US bank, “may need to make changes to our European legal entity structure and the location of some roles.” The consultant suggested this is an understatement: “J.P. Morgan has just let four buildings in Madrid and six buildings in Frankfurt. All the banks have been planning this for weeks. At 7.30am this morning, their contingency plans kicked in.”

Dimon said previously that 4,000 of J.P. Morgan’s 16,000 UK jobs could move overseas if Britain leaves the European Union. J.P. Morgan declined to comment.

A financial services partner at another leading strategy consulting firm, also speaking on condition of anonymity, agreed that the impact of the Brexit vote will be felt sooner rather than later in London finance circles. “These banks are going to start moving roles overseas very quickly,” he said, citing one client which has made preparations to move 1,000 roles out of the City. “The impact on the London economy is going to be dire.”

Chris Wheeler, banking analyst at Atlantic Equities agrees: “There are going to be a mass of finance jobs moving out of this country and they’re going to move soon. Anyone who thinks J.P. Morgan or Morgan Stanley are going to wait years before moving their thousands of jobs is in cloud cuckoo land. They’ll want to get uncertainty out of the way and to comply as soon as possible. This is the biggest change in London since the Big Bang.”

London bankers who think they’re in with a chance to move to Madrid or Dublin could be sorely disappointed. Consultants are in agreement: roles will be cut in London rather than migrated overseas. “Why would you move someone who’s earning £150k in London to do a £60k job in Frankfurt,” said one.”Banks are going to use this as an opportunity to cut costs.”

London bonuses are also likely to plummet this year, dealing a double blow to staff at European banks who’ve seen the value of previous years’ bonus deferrals collapse. “This is just going to hammer people,” says one headhunter. “If you’re a banker in London now, you’re going to stop spending. Cancel the nanny. Cancel the holiday. Cancel the extension.”

Continental European financial centres will benefit from London’s pain. “For European banks, front office jobs are going to be repatriated to the home country – wherever that bank has it’s headquarters. Back and middle office jobs are a different matter,” said the consultant. “There, you’re looking at Dublin, Poland, or the Czech Republic.”

The real question is where US banks will choose to relocate their European headquarters. Goldman Sachs has a sixth of all its employees globally in the City and is in the process of building a big new European HQ in London’s Farringdon – although consultants said it’s been quietly looking at subletting space in the building before it’s even finished. Morgan Stanley president Colm Kelleher touted Dublin or Frankfurt as potential locations for Morgan Stanley’s European HQ in future. Madrid is a new option – and a wild card, but one consultant said it’s popular with bankers who will be kept on: “The senior guys are all hoping for Madrid.”

As bankers in London stare over a precipice, the consultants we spoke to are doing just fine. “The emails from clients are coming right, left and centre,” said one. “30 projects across different banks went live for us this morning,” said the other “All the big strategy firms, McKinsey & Co. Bain, Boston Consulting are being dragged in. Everything needs to change.”

Photo credit: moodboard

Comments (24)

  1. We now need to find the worlds smallest violin to complete the job then…

    efinancialcrisis Reply
  2. I don’t feel sorry for those greedy bankers with the 150k+ incomes and huge bonuses but I do feel sorry for the mid-level functionaries. Britain will come out stronger.

  3. Essex may come to seriously regret it’s overwhelming vote to Leave.

    If this article is accurate, London will have to innovate its way out of this mess. We need to show we have the ideas and the talent to overcome any regulatory barriers that get put in our way.

  4. Would you rather she lie and say everything’s hunky dory?

  5. These are all assumptions……nothing to worry for the short time as it is a unfreeze moment in the change process.

    No business leaders from my contacts with large Financial Institutions have indicated anything yet…Some people just like to see others panic and enjoy the show……

    Lets get over and work for new future….

  6. You are very right John. But unfortunately these kind of negative news preachers are all over the place….

  7. We could potentially lose our jobs (give it 24 months). Talents will migrate to Dublin, Singapore, Zurich, Sydney and wealthy EU cities. I am an IT professional serving the financial services in the city. No I don’t get paid 150K and I’m not greedy. I’m just a normal person on avg income.

  8. Do you honestly believe it is about laying off greedy fat bankers? Are you drunk or what? Those will be average people working in the bank services. With salaries just like yours. The fat bankers will just move to Germany, that’s it.

  9. Gospel of Matthew, chapter 26, verse 52 – “You live by the sword, you die by the sword”

  10. Brexit is a great opportunity for London to grow as the financial world capital. Nowhere does this inflammatory author say why banks would move staff. It’s a hit piece for the sour grapes ‘Remainders’.

    Made Britain Great Again Reply
  11. Morgana, why not feel sorry for rich bankers.. They work extremely hard and this is a terrible blow for them and their families. Plus, you do realise that it is not just them? The knock on effects are huge for everyone … From cleaners to the construction industry, for average employees, even for the sandwich shops and restaurants that rely on these ‘rich bankers’. This is a catastrophe for London, and so unnecessary too. I wish I could pelt Boris with eggs, he was mayor of London and he should have put the interests of the city before his own stupid career.

  12. Typical Scaremongering. With all the recent banking scandals it’s not surprising that they were already looking at ‘efficiencies’ and this just adds to their excuses. Some of the banks had already announced cuts anyway.

    Now, what if the UK became a tax haven, what if we stay in the single market, what if some companies want to expand in the UK, what if Boris (or other) finds a way to make it more attractive? What if France leaves the EU later, or Spain moves to leave, or what if the EU starts to fragment? What then? What if journalism is now cheaper to be outsourced to a remaining EU state, will all the journalists be at risk too? What if???

    And that is just the basis of this article, what if, what if, what if?

    Truth is, we don’t know. All businesses make efficiencies, it won’t just be the banking sector, the Health industries, the tech companies, maybe even motor industry, they’ll all be looking, and many already were.

    Stop scaremongering and try to make things work.

  13. The bankers have took the British tax payers money to support the crash that they caused a few years ago so let’s see if they get the same from abroad good bye you greedy lot

  14. People here need to Google employment multipliers. But then again all the Leavers were an uneducated bunch.

    Lets say you have someone on 40k. The person making that money will spend the money. Creating a multiple of 3. Someone on 150k? Multiple of around 11. Take that 3-11 and times 100k. Your talking a job hit of 500k plus. Hospitality, construction. Everything.

  15. The comprehensive Leave plan has all this covered.


  16. This is NO surprise — at all!

    All anyone had to do was look at my homecity, Montréal QC Canada – to see what uncertainty about separation has done over the past 3 decades.

    Even just the uncertainty, resulted in toppling Montréal from the premier and largest financial center of Canada, and probably 2nd only to New York City, in all of North America. Toronto Bay St is now the world-famous Canadian financial center.

    Headquarters flight from Montréal, again to Toronto, but also Calgary and Vancouver!

    No one certainly expected anything less of London-based financiers and corporations in light of an actual outright exit from a larger union such as Europe, did they????

    I hope Dublin (I’ a citizen of Ireland btw) picks up a lot of these companies that want to keep using English a lot. Of course it would be a no-brainer for bankers to HQ in Frankfort, home of the ECB!

    Madrid IS a wild card. I foresee, that with the uncertainty always of Catalonia discontent and perhaps a referendum vote for separation, IF the EU rules change to eliminate the 5 yr ascension penalty…..

    but this will be in light of what is decided about Scotland or Northern Ireland, as the EU rules are not really clear – or can be changed – regardiing separation from a parent country that might leave….just in case Spain gets the same nationalistic bent that swept the UK. Or if Spain gets screwed as part of the PIIGS or through other EU imposed changes on austerity or whatever.

    Again, just the uncertainty of Madrid investment, with the risk of Spain splitting apart at any time. May never happen….

    but look at Montréal and Canada!
    exact same situation.

    # those who forget history are doomed to repeat it. And those of us who remember history are doomed to watch everyone else repeat it because they won’t listen to us.

  17. What morale building goal does this site have?

    The info should be realistic information about careers in Financial sector.

    The honesty, is that anyone who has a job, should stop spending and put money into savings teporarily because there WILL BE JOB LOSSES.

    People who moved to London solely to try to get into banking but are doing other things like waiting tables or something, need to now be honest with themselves that they are NOT going to get banking jobs in London.

    What will help your financial career, is to put some money to survive while you are unemployed, and look at trying to hurry up and polish your resume to send to Frankfort or USA based companies and transfer your skills….

    or to look for another job in another field — or to plan for early retirement if one is say in their 50s or 60s.

    Planning for contingencies — or outright certainties — of losing a job….

    that IS a part of career planning!

  18. I think people need to be honest with themselves the author is trying to do their job, constructing a topical article with some smidgen of well publicised comments from other leading news sources and some speculation and hype from unnamed or not credible sources.
    I think that is lazy journalism, but who am I to judge, certainly not a journalist and the author got paid and has generated lots of comment so maybe they are better at journalism than I appreciate.
    Anyone working in banking in London shouldn’t expect sympathy from any none banking person working in an average job and perhaps voting for brexit, There is bound to be a certain amount of schadenfreude and I say this having experienced banking in London at first hand for nearly a quarter of a century.
    Frankly anyone who has been successful in banking (my only success has been surviving so long) should have developed a thicker skin and understand capitalism always looks for cheaper ways of achieving the same results. If you become skilled and you get a high wage but can’t attribute revenue and profit to your work and can’t differentiate yourself from cheaper alternatives then you will lose your job.
    This is true whether barriers and impediments to access EU markets are there as result of brexit or not.
    If you have been greedy and / or lazy and thought that you deserve supernormal profits or wages whilst being mediocre then this will be a wake up call. Your current cushy job in London could disappear it may be replaced with another more dynamic job or it may move to another city in the EU and if you want to continue to work you will need to adapt, maybe retrain and perhaps relocate for lower wages.
    But for all those in the ordinary economy who maybe gloating this will affect you too, now I could talk about trickle down effect, I could talk about uncertainty impacting investment, I could talk about credit ratings, inflation, deficits and tax rises.but I won’t.
    All I will say is that brexit will have far reaching and unforeseen impact on many aspects of our lives, we will need to stick together to make it work and guard against our allies, partners and others who hold our values of tolerance and integrity in high esteem, not wanting to work with us or contribute to our economy and institutions as freely as they did on June 22nd 2016.

  19. @honestjohn. Briefly, I work in an area allied to finance too and clearly hope that the scenario outlined in the article above is not one that unfolds in the months to come. However, the article reflects the comments of consultants working with banks on Friday. The comments are not recycled from elsewhere as you suggest and the journalism was not lazy. It was time-constrained, and over this week we will endeavour to offer further appraisal, some of which is likely to offer an alternative scenario for the future. Sarah

  20. You’ll feel sorry once these people leave the country and your welfare is cut due to reduced tax revenue.

  21. You need to learn the difference between ‘let’ and ‘rent’. It’s fairly basic. You misuse ‘let’ above.

  22. The comments from JP Morgan and Morgan Stanley about job losses were before the referendum, so they were part of Project Fear. Morgan Stanley has since denied plans for job cuts http://www.independent.co.uk/news/business/news/morgan-stanley-brexit-eu-referendum-jobs-dublin-frankfurt-a7100911.html and the above article says that JP Morgan is now not commenting. The large international financial services firm I work for has adopted a “wait and see” policy. So we’re really just left with the anonymous consultant at the start of the article. Hiring will slow down because of uncertainty in the short term, and yes, there is huge demand for Brexit strategy consultants; that’s as it should be.

  23. I’m afraid that I must agree with the ‘scaremongering’ observations above. It is far from straightforward to recruit and train the folk necessary to replicate services and processes currently delivered in London. It’s not merely a matter of scale of available talent pool (where London/NY/Singapore/HK are pretty well unparalleled), it is also the support infrastructure proximate to these folk currently located in one of these global centres: I’m talking about: accountants, lawyers, risk specialists, IT folk, contractors, etc

    Let’s just look how long it has taken CS, DB, MS, etc to establish ‘offshore’ competency centres. Years – and typically, the range and depth of services delivered has been quite narrow/shallow.

    I understand that some folk have gone into a bit of a tail-spin since friday morning, however, I do expect logical folk in the City will get a more balanced view once they explore the practical challenges of establishing centres outside of their current home locations.

  24. UK tax haven? Are you serious? How would you pay for NHS and unemployment benefits?

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