The investment banking industry will see thousands of job cuts
as mergers are completed and companies prepare for a slowdown in
business.
IT support is likely to be hit hard as firms scale down for
lower business volumes and merging firms cut out overlapping
roles.
Investment banking giant Credit Suisse announced 5,300 job cuts
and the
Bank of America's (BoA) takeover of Merrill Lynch is expected
to lead to as many as 20,000 redundancies.
According to Bob McDowall, analyst at TowerGroup, as many as
300,000 people could have lost their jobs in the financial services
sector globally by the end of 2009, with as many as 25% of that
total drawn from IT professionals.
He said there were more job losses to come and the number of
cuts already made or announced is likely to double by the end of
next year.
Credit Suisse announced it will cut its workforce by 11%,
including IT jobs that support investment banking.
"These reductions, the vast majority of which will have taken
place by the end of the first half of 2009, will be primarily in
investment banking and in related support areas," said a company
statement.
The European Commission gave approval for a deal that will see
the BoA acquire Merrill Lynch for $50bn and shareholders will vote
on the proposed deal later today. There will be cuts as a result of
overlap and the weak economic conditions.
The banks have about 360,000 staff in total and Merrill Lynch
has around 8,000 employees in Europe, the Middle East and Africa,
including around 4,500 employees in UK.
Japan-based investment bank Nomura, which
bought part of Lehman Brothers' in October will cut 1,000 jobs
in London as a result of the integration of the companies.
TowerGroup figures to be released next week will show that IT
spending by European investment banks will fall 9% next year. In
the US spending will drop 15%.