City of London recruitment hit by cost-cutting

London: The City of London remained a weak spot in the UK’s otherwise booming jobs market last month, with new vacancies 11 per cent down on the same time a year ago, a recruiter has reported.

Cost-cutting at European and UK investment banks depressed overall hiring in the London financial services market as they sought to bring down their cost-income ratio, said Astbury Marsden.

There were 2,190 new vacancies in June, down 13 per cent on the figure for May.

“The recovery in investment banking jobs at the start of this year now runs the risk of petering out,” said Jonathan Nicholson, managing director.

“Such is the pressure to shrink balance sheets that even the economically profitable areas of some banks are being told they can’t expand.”

Barclays announced in May it was cutting 7,000 jobs in its global investment bank, more than a quarter of the staff, following cuts at European rivals UBS, Credit Suisse and Royal Bank of Scotland.

Across the economy, employment is increasing rapidly. The number of people in work grew by 345,000 to 30.54 million in the three months to April, the fastest quarterly rise since records began in 1971, according to the Office for National Statistics.

The CBI employers’ group and PwC expect financial services employment across the UK to reach 1.132 million by the end of September, up 13,000 on a year ago but still 79,000 below the peak reached at the end of 2008.

Astbury Marsden said that while new investment banking jobs were being created, these were largely in areas other than revenue generation. Compliance and risk related roles now made up four in 10 City hires.

Another area of recruitment was for IT specialists to automate their foreign exchange and interest rates trading units to cut costs and lower the risk of price manipulation, which in the longer term would lower headcount.

— Financial Times