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Financial crisis seen hitting 20,000 London jobs

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Joined: 30 Jul 2007
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Kudos [?]: 59 [0], given: 5

Location: Europe
Schools: St. Gallen '09
Financial crisis seen hitting 20,000 London jobs [#permalink]

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New post 27 Jan 2008, 13:40 ... 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."

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.

Kudos [?]: 59 [0], given: 5

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Financial crisis seen hitting 20,000 London jobs   [#permalink] 27 Jan 2008, 13:40
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Financial crisis seen hitting 20,000 London jobs

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