Bankers around the world prepare to hang up their red suspenders as thousands of layoffs are planned.
Universe shrinks for bankers in the US and Europe
Not so long ago the masters of the universe, bankers around the world are suddenly finding themselves on the dole.
Banks in the US and Europe, including Lloyds Banking Group, UBS and Goldman Sachs, are making plans to slash staff numbers as they seek greater profitability, following a quarter of disappointing earnings by banks previously thought of as impervious financial juggernauts.
Amid a turndown in the West and incoming regulatory measures, banks have been looking to trim their costs wherever possible, said Cormac Leech, a banking analyst at Canaccord Genuity.
"The slower economic growth and tougher regulation implies lower revenues for banks," he said. "In an effort to maintain good returns for investors, banks are being forced to focus on their bottom line by reducing costs."
New efforts to reduce risk-taking in the banking sector and ensure banks are adequately protected in the event of crises, such as Basel III regulations, are expected to come at the expense of profitability.
Meanwhile, economic growth in the UK has largely ground to a halt following a range of austerity measures, while the financial services sector in the US has reported lower-than-expected earnings results.
Goldman Sachs announced "expense reduction initiatives" including 1,000 layoffs this month, while Lloyds expects to cut 15,000 jobs as it closes about 15 of its overseas branches. Morgan Stanley is also preparing layoffs of about 300 "underperforming financial advisers" in the US.
UBS also announced layoffs last week, with an unspecified number of workers expected to lose their jobs as the Swiss bank plots a course to save up to 2 billion Swiss francs (Dh9.34bn).
Credit Suisse also announced on Thursday, alongside its earnings report, it would fire about 2,000 staff. Staff at HSBC are reported to be next in line, with thousands of positions under threat when the company reports earnings tomorrow.
The bank declined to comment.
Jobs in banking, insurance and other financial services fell slightly in London, alongside the swathes of job cuts at many "bulge bracket" firms.
New jobs on the market in financial services in London fell by 2 per cent to 5,544 last month, compared with the same period last year, according to Morgan McKinley, a recruitment firm.
Job creation in the second quarter of the year also underperformed the preceding three months for the first time since the financial crisis erupted in mid-2007.
The picture appears more mixed in Singapore, where some banks are increasing off-shoring of staff to nearby Asian hubs such as Mumbai and Manila.
While the most recent round of job losses has so far been confined to banks outside of the Gulf, many banks in the UAE have also opted for layoffs during the first half of this year.
Banks operating in Dubai and Abu Dhabi have transferred end-of-service payments to at least 292 staff, with Shuaa Capital, First Gulf Bank, HSBC Middle East and Barclays Bank all reducing staff numbers since the start of the year.