IT depts under threat as City braces for 20,000 job cuts
Worse than dotcom losses
The City of London could lose 20,000 jobs in the next two years as the credit crunch starts to bite.
As many as 11,000 jobs could be lost this year followed by another 8,200 redundancies in 2009.
The number of deals is also expected to fall - mergers and acquistions will drop 26 per cent this year and trading volumes on the London Stock Exchange will drop 36 per cent.
IT departments are likely to feel the pinch along with traders as banks look to cut costs and headcount. Research last month from the CBI predicted a big slowdown in IT spending in the finance sector. The CBI found IT spending overall likely to be flat. It also found a third of firms expecting to cut jobs in the next quarter.
Job losses will be worse than the dotcom crash, when 15,300 jobs were lost, according to research from the Centre for Economics and Business Research.
Worst hit will be corporate finance, investment banking and derivatives trading. Researchers say jobs lost already - at Royal Bank of Scotland and Citibank are just the tip of the iceberg.
In 2007 some 351,000 people were employed in City jobs - there won't be this number of jobs in the City again until 2012.
A global slowdown and consumer slump is likely to slow recovery until 2009.
Because London is so dependent on financial services its growth will slow to 1.3 per cent in 2008 and 2009.®