A slew of lay-offs hitting banks gathered pace on Thursday, with thousands more job losses set to hit retail businesses and market divisions, as lenders fight off a limp economic recovery, trading woes and tougher regulation.
Britain's HSBC Holdings Plc
These lay-offs added to cuts announced at Switzerland's Credit Suisse Group AG
All this reflects how tough conditions continue to be in the sector, and the Q2 (second quarter) reporting season may not likely make for good reading, Mediobanca said in a note.
A tough second quarter for investment banking earnings, dragged down by sovereign debt woes in Europe and trading jitters, is prompting many to cut back in areas where revenue has not come up to scratch.
Retail banking is equally vulnerable.
About 700 job reductions at HSBC will mainly affect UK branch offices. The bank said about 460 financial advisory positions were set to go in retail and wealth management.
The redundancies add to 15,000 jobs set to go at Britain's part-nationalized Lloyds Banking Group Plc
This latest round comes on top of 27,000 job losses at Lloyds since the 2008 financial crisis. Trade union Unite slammed the redundancy plans at the two British banks, saying it was flabbergasted by HSBC's move.
Unite has been informed that these cuts will generate savings of around 9 million pounds for HSBC. Is it a coincidence that this figure is the equivalent to the bonus for Stuart Gulliver, HSBC Chief Executive, due to be paid later this month? said David Fleming, Unite national officer.
HSBC, which employs 55,000 staff in the UK, declined to comment. Lloyds employs 103,000 staff.
Across Europe other banks are swinging the axe too. Popolare, which has 20,000 staff, became the latest Italian lender to kick off cutbacks on Thursday, saying it was cutting 1,120 jobs.
Banca Monte dei Paschi di Siena
Credit Suisse is among those kicking off one of the deepest round of lay-offs so far this year. Cuts at its investment bank will affect around 600, people familiar with the matter said.
About 100 of those cuts are expected to fall in London, where the bank launched a consultation on jobs this week. Credit Suisse declined comment.
Lay-offs are even starting to fall at some of the biggest Wall Street investment banks, more than two years after many began putting the financial crisis behind them.
Goldman Sachs Group Inc
Few expect these cuts to hit too many senior dealmakers for now, although investment banks are starting to look at trimming more than just their trading teams, so a few top bankers could begin to feel the heat.
Employees in IT or other forms of support staff will likely bear the brunt of redundancies at investment banks for now, headhunters and analysts believe.
People aren't going to send their rainmaker away. It's more about efficiencies, streamlining and outsourcing. It's going to affect support functions in particular, said one headhunter working in London, who declined to be named.
Not all the cuts mean people actually have to go.
Standard Chartered reduced its staff numbers by about 1,300 in the first five months of the year by not filling open positions. The bank is heading for record profits in the first half of this year thanks to staff cuts coupled with growth in Hong Kong and other Asian markets.
On top of the 700 actual jobs going at HSBC, a further 140 vacancies will now not be filled, one source familiar with the matter said.
(Additional reporting by Martin de Sa'Pinto in Zurich and Ian Simpson and Andrea Mandala in Milan; Editing by Will Waterman and Sophie Walker)