The CBI has warned that financial services companies in the UK could cut around 15,000 jobs over the next three months as the focus sharpens on lowering costs.
In the final three months of 2010, banks, insurers and other financial institutions shed around 30,000 jobs, Lai Wah Co, the CBI’s economic analysis head, reported. She predicts that a further 15,000 jobs may be lost this quarter.
This is not the standard across all areas of the sector. The main job losses are concentrated in banks, building societies and life insurance companies, she added. Investment managers and securities traders are continuing to hire employees.
In Q3, 2008, the financial services sector employed 1.1 million people. By the end of March this year, the CBI estimates that figure will have dropped to around 970,000.
Meanwhile, Morgan McKinley’s hiring market survey for 2011 shows that more than 50% of financial services firms expect to see recruitment rising this year. 54% of managers expect to increase their permanent headcount in the first half of this year and 29% are planning to take on temporary staff.
Morgan McKinley’s December Employment Monitor showed a monthly decrease of 48% in new vacancies on the City financial services job market. The number of candidates also dropped by 33% compared to the previous month. At the same time, average salaries for people securing a new role increased by 6% on November.
George Osborne has calculated that the private sector can create enough new jobs to offset the 330,000 expected public sector redundancies but those calculations don’t take into consideration the cuts in the financial services sector. As employment opportunities diminish, will we see an increase in people becoming umbrella company contractors?
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