Photo: mugley via Flickr
Earlier today, Bloomberg reported that European banks will resort to cutting Jobs as they try to boost revenue per employee.The Centre fo Economics & Business Research Ltd. reported in May that London’s financial-services industry may soon see its lowest employment numbers in 16 years.
And, London is considered to be one of the world’s top banking cities.
To reduce costs for Western European investment banks, a Hoffmann-Becking report suggests that to decrease costs by 29%, employee pay must be reduced and headcount must drop by 10% to 12%. The report also suggests that employee pay is far too high, at 35% higher than long-term averages.
According to Bloomberg, revenue per employee for 2011 at Credit Suisse and UBS were down about 50% from 2006. However, UBS is one of the few European banks that has actually decreased its work force since 2006, which is down 21% over the five years.
So far this year, Western European banks have only slashed 16k jobs, while Bloomberg believes that over 107k were cut in 2011. With the needed job cuts, there could be over 100k layoffs by the end of 2013.