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%.