European Banks Trim Employees as Regulations Tighten
European banks have taken a hit in their employment numbers as the region’s economy enters into the first phases of recovery, Bloomberg reports.
While good economic data may be a cause for celebration among politicians, even the best news of late has not come across as positive for the future of large investment banks in Europe. Between additional government regulations, new guidelines, and a downturn in many profitable areas of business, investment banks have found themselves in a squeeze. Fewer streams of revenue and higher costs have left many firms no choice but to trim positions from their ranks, leading to significant losses of employment in the sector.
Since 2011, employment levels in the financial lending industry have sunk by 7 percent, according to Reuters. Projections by several recruiters in the London area suggest that next year’s declines could easily be over 5 percent, with some believing that the drops could reach the 15 percent threshold. If the industry made cuts of that caliber in the coming year, employment in the sector would have dropped by more than 20 percent between 2011 and 2014, the news service says.
The greatest part of the cuts have come in departments regarding so-called “fixed-income” transactions. Encompassing government bond services, commodity trading, and currency exchanging, fixed-income activities comprise nearly half of the investment revenues of banks like Barclays and Deutsche Bank. Fixed income employment has been particularly hard hit of late, with cuts over the course of the last year totaling as much as 12 percent for European firms.