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Financial crisis seen hitting 20,000 London jobs

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Financial crisis seen hitting 20,000 London jobs [#permalink] New post 27 Jan 2008, 12:39
http://www.telegraph.co.uk/money/main.j ... obs127.xml

Financial crisis could cost London 20,000 jobs

By Jonathan Russell
Last Updated: 12:57am GMT 27/01/2008

As many as 20,000 City jobs are likely to be wiped out by the financial crisis, according to one of the first comprehensive forecasts of the toll on London's economy.

Experian, a leading economic forecaster, has slashed its predictions for job growth in the City and Canary Wharf from neutral to up to a 5 per cent fall in net employment this year.

On Friday even Goldman Sachs ­- one of few investment banks to have largely weathered the storm - announced that it was to cut up to 5 per cent of its 30,500 global workforce, equivalent to 1,500 employees.

Andrew Burrell, an economist, said: "Things are moving very fast. There are announcements and rumours every day. Our forecast for job growth in the City was that it would be flat; however, we have had to change that.

Now we expect the figure to be something like 10,000 to 20,000 jobs lost over the next year."
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Experian, which supplies data and forecasts to leading government and private bodies, is now modelling its predictions on the last economic crisis to hit the City, the dot-com bubble of the early 2000s.

With up to 400,000 people employed in London's financial district a fall of this scale could severely affect the economy, dragging commercial property prices down as well as hitting related industries such as IT and telecoms.

Burrell said: "I think the majority of these jobs will go from the financial sector. However, the business services sector may also be hit."

Analysts at JPMorgan estimate that 21,000 jobs could go over a two-year period, resulting in a 10 per cent drop in commercial property rental values in the City. With prices for commercial property already on the slide a fall in rental values could result in an even sharper correction.

Although nearly all of the big investment banks have announced global job cuts few have revealed exactly how many will go in London. On Monday Credit Suisse said that it was losing 150 employees in the City, while it is thought 10 per cent of Citigroup's 4,200 job losses could come from London.

Burrell said: "One of the issues is going to be whether the rest of the economy can take up the slack. In 2000 the growth in other areas such as retail helped compensate for the fall in financial employment. We don't see that happening this time."

Other banks to have announced global job cuts are Citigroup, which is losing 4,200, UBS 1,500, Morgan Stanley 600, Credit Suisse 470 and Deutsche 300. Banks including Lehman Brothers and JPMorgan, which have implemented limited job cuts, have said that they may have to cut more staff.
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Re: Financial crisis seen hitting 20,000 London jobs [#permalink] New post 27 Jan 2008, 13:01
London olympics will counteract some of the effect of the job losses as its creating lots of jobs in London. Likewise, it will also prop up property prices in E.London where there is lots of development ongoing in preparation for 2012
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Re: Financial crisis seen hitting 20,000 London jobs [#permalink] New post 27 Jan 2008, 14:54
Prop up East London property prices? There is a good reason why they put the olympics where they did - it was a really run-down area.

Also I don't see how you can argue 20,000 city workers losing jobs is offset by increased available jobs as a building-site labourer. Most of those jobs will be filled by eastern European workers (if building work in London follows its trend) and is seriously damaging.
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Re: Financial crisis seen hitting 20,000 London jobs [#permalink] New post 27 Jan 2008, 16:53
Hey, i'm talking economy in general.
I know E.London well enough, i worked in London for 5 years, and still own a house there (West). East London prices are shooting up, i know a fair few people who have been snapping up properties. One friend in particular, has a masters in urban regeneration and is working in London based on this area. He's been telling me the amount of investment and the huge amount of jobs the olympics has been creating and the predicted job growth and plans for even after the olympics finish.

The 20,000 city workers will hit the high end property market and not the average joe market. Most of them live around Canary Wharf (which is right next to Towler Hamlets anyhow which is arguably the most run down area of London), or commute in from Essex.

Also, notice i said counteract some . As for eastern european immigration being bad for London....... let's not get into this area. I had enough of that shit when i was younger and people telling me to go back to my country even though i was born in the UK.
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Re: Financial crisis seen hitting 20,000 London jobs [#permalink] New post 27 Jan 2008, 17:38
Now that's a curious statement, why would the influx of Eastern Europeans be bad?
Last I checked, both UK and most major economies of Eastern Europe were part of the EU. So much for transnationalism, eh?
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Re: Financial crisis seen hitting 20,000 London jobs [#permalink] New post 27 Jan 2008, 17:41
Okay, I can see how there was some lack of clarity in the last post. I am not saying that any Eastern European immigrants is a bad thing at all - to be honest I think they have had a distinctly beneficial effect on the way the UK has developed in the past four or five years as it has begun to take some effect through the EU. The way that it runs is that you aren't seeing what would be classic employment regeneration (like with like) and are looking at something that is drawing different groups to different areas of the market, and it muddies the way you would see the unemployment (a lot of the labour will not have been technically unemployed in the UK before migrating for the jobs). I am sorry if I appear I may have guided you towards that impression - I kind of submitted something half written without proofing it for whether my intented phrase read correct. I had no idea of your background, Togafoot, and am sorry to hear that was your childhood but please don't label me something I am not.

Obviously the olympics is an investment, and a wonderful investment based on taxing the London and UK population heavily to fund a ridiculous event with little long term feedback. It is in Britain, it is government endorsed, and plan all they like it won't move the way they intend. East London has been rife for regeneration for decades - investment or whatever, I doubt you will find someone who will happily walk around Bow in a suit. Hackney maybe, but you better give me a long jacket.

The net effect on labour by replacing extremely highly paid labour with low-paid work to have a net level effect on overall figures is misleading. The tax effect on this and funds generation is much much lower, so is obviously damaging. Taking the top end of income figures is hugely damaging - the effects of passdown and the whole wage inflation -> increased housing prices caused the mess London is right now with extraordinarily expensive property. There was a drag through - because houses in Chelsea were moving for 4m, you saw the whole of London get pulled along with it as everyone got stressed. If the job loses are anywhere near medium term, you start to see that unwind. Which will be damaging all the way down. There is no great disconnect in the housing market that the high tier won't be responsible for a domino effect.

As for where these people live - it varies. From Mudchute to North or SW London, outside the orbital to Kent or Essex, or Shoreditch or wherever. You can't really generalize on where these people are living, or the effect that these redundancies have the potential to have. The widespread nature really is just the London commuter belt, and the effect could be really damaging net of all.
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Re: Financial crisis seen hitting 20,000 London jobs [#permalink] New post 27 Jan 2008, 19:20
trader1 wrote:
http://www.telegraph.co.uk/money/main.jhtml;jsessionid=FTGFUU0T0XR15QFIQMFCFFWAVCBQYIV0?xml=/money/2008/01/27/cnjobs127.xml

Financial crisis could cost London 20,000 jobs

By Jonathan Russell
Last Updated: 12:57am GMT 27/01/2008

As many as 20,000 City jobs are likely to be wiped out by the financial crisis, according to one of the first comprehensive forecasts of the toll on London's economy.

Experian, a leading economic forecaster, has slashed its predictions for job growth in the City and Canary Wharf from neutral to up to a 5 per cent fall in net employment this year.

On Friday even Goldman Sachs ­- one of few investment banks to have largely weathered the storm - announced that it was to cut up to 5 per cent of its 30,500 global workforce, equivalent to 1,500 employees.

Andrew Burrell, an economist, said: "Things are moving very fast. There are announcements and rumours every day. Our forecast for job growth in the City was that it would be flat; however, we have had to change that.

Now we expect the figure to be something like 10,000 to 20,000 jobs lost over the next year."
advertisement

Experian, which supplies data and forecasts to leading government and private bodies, is now modelling its predictions on the last economic crisis to hit the City, the dot-com bubble of the early 2000s.

With up to 400,000 people employed in London's financial district a fall of this scale could severely affect the economy, dragging commercial property prices down as well as hitting related industries such as IT and telecoms.

Burrell said: "I think the majority of these jobs will go from the financial sector. However, the business services sector may also be hit."

Analysts at JPMorgan estimate that 21,000 jobs could go over a two-year period, resulting in a 10 per cent drop in commercial property rental values in the City. With prices for commercial property already on the slide a fall in rental values could result in an even sharper correction.

Although nearly all of the big investment banks have announced global job cuts few have revealed exactly how many will go in London. On Monday Credit Suisse said that it was losing 150 employees in the City, while it is thought 10 per cent of Citigroup's 4,200 job losses could come from London.

Burrell said: "One of the issues is going to be whether the rest of the economy can take up the slack. In 2000 the growth in other areas such as retail helped compensate for the fall in financial employment. We don't see that happening this time."

Other banks to have announced global job cuts are Citigroup, which is losing 4,200, UBS 1,500, Morgan Stanley 600, Credit Suisse 470 and Deutsche 300. Banks including Lehman Brothers and JPMorgan, which have implemented limited job cuts, have said that they may have to cut more staff.


This is why i'm thinknig twice before investing in a MBA program. What can i do if i pass out and there are no jobs ?? Looks like a very naive question but logical right ?? What are your thoughts folks ?
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Re: Financial crisis seen hitting 20,000 London jobs [#permalink] New post 28 Jan 2008, 02:21
trahul4 wrote:

This is why i'm thinknig twice before investing in a MBA program. What can i do if i pass out and there are no jobs ?? Looks like a very naive question but logical right ?? What are your thoughts folks ?


Lately I've been thinking twice as well. Haven't even finished my applications b/c these thoughts are in the back of my mind plus I'm so engrossed in my trading right now. This is my full-time business, and I am bearish on the markets. I can't seem to reconcile my desire for an MBA and my perspective on the financial markets. It's getting ugly out there. I want to do an MBA, but only if the price is right. At this point, I can't see making a $100k+ investment into schooling and the ultimate backfire of no employment following the MBA.
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Re: Financial crisis seen hitting 20,000 London jobs [#permalink] New post 28 Jan 2008, 04:21
I can see exactly where you are coming from trader - esp since volatile markets are a trader's best friends. Although, do remember that the MBA is an investment for life - not just for the job following the MBA. I think what irks me most is the two years of opportunity cost on top of the costs of the MBA. Although I do also feel that now is the right time to pursue this; I am at the right age and I would be leaving my current industry (IT) before it goes downwards. More importantly, I feel mentally prepared for this; which I wasn't 2-3 years ago.
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Re: Financial crisis seen hitting 20,000 London jobs [#permalink] New post 28 Jan 2008, 05:45
ya there are different ways of looking at it but it's imperative we do our mba from top 15-20.. Now coming to lesser raked schools outside US/UK ( st.gallen for exmple or for that matter AGSM/MBS down under) , is it worth doing from these schools, specially for those who are from outside (for ex non-EU candidates for St Gallen). Ultimately getting a job depends on the person but these volatile markets really cause some fear ...
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Re: Financial crisis seen hitting 20,000 London jobs [#permalink] New post 28 Jan 2008, 06:58
trahul4 wrote:
Now coming to lesser raked schools outside US/UK ( st.gallen for exmple or for that matter AGSM/MBS down under) , is it worth doing from these schools, specially for those who are from outside (for ex non-EU candidates for St Gallen).


It might be important to assess the health of the regional market certain schools are in.

Also, each person's financial situation might be different. If you plan on taking more loans than dipping into own savings, that could be a recipe for disaster should there be no job following b-school.
Re: Financial crisis seen hitting 20,000 London jobs   [#permalink] 28 Jan 2008, 06:58
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