In a year marked by significant economic shifts, the global banking industry has seen a drastic reduction in its workforce, as reported by the Financial Times on Tuesday. The tumultuous year, marked by significant economic shifts, has witnessed more than 60,000 employees being laid off by twenty of the world’s largest banks. This makes 2023 one of the most challenging years for job cuts since the financial crisis of 2007-2008.
The layoffs were particularly pronounced among Wall Street lenders, with their investment banking businesses grappling with rapidly rising interest rates in the United States and Europe. These institutions accounted for at least half of the total job cuts.
Switzerland’s UBS led the pack in terms of absolute numbers. As it initiated the takeover of its former competitor, Credit Suisse, UBS reported a reduction of 13,000 positions within the merged entity, bringing its total workforce down to 116,000.
When viewed in terms of percentages, the UK’s Metro Bank topped the list with a 20% reduction in its workforce. UBS followed with a 10% cut, and Goldman Sachs, another Wall Street giant, completed the top three with a 7% reduction.
Lee Thacker, owner of the Silvermine Partners financial services headhunting firm, painted a bleak picture of the industry’s future. “Most banks are experiencing a lack of stability, investment, and growth, and we can expect to see further job cuts,” he warned.
The current situation draws uncomfortable parallels with the global financial crisis of 2007-2008, during which lenders slashed more than 140,000 jobs.
Adding to the turmoil, Credit Suisse’s share price plummeted nearly 30% in mid-March, triggering concerns about a potential liquidity crisis. This development came on the heels of the collapse of several US financial institutions. Later that month, the Swiss National Bank announced UBS’s acquisition of Credit Suisse, marking a significant shift in the banking landscape.
(With inputs from the financial times)
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