New City jobs drop 11% in July as end of year job cuts come early

Tough trading conditions for the banking sector are behind an 11% fall in the number of new City jobs in July says Astbury Marsden, a leading financial services recruitment firm.

According to Astbury Marsden, 4,800 new City jobs were created in July 2011, down from 5,400 created in June 2011.

Mark Cameron, Chief Operating Officer at Astbury Marsden, says: “Behind the headline job cut figures, new roles are being released but at a lower rate than last month – it is more than the normal summer slowdown.”

“Banks are still replacing the vast majority of staff they lose through natural attrition. Some teams are continuing to expand – especially the recent mainstays such as regulatory and risk within investment banks. However what we are seeing is a combination of cost cutting to make up for weak revenues and a bigger cull of lower performing staff than would normally happen.”

“Typically an investment bank might try to manage out or make redundant the bottom performing 5% of its staff every year. This year some banks are looking at the bottom 10% – and they are making these cuts at least three months early.”

“The headline job cut figures may appear very shocking, but many of these job cuts are a result of banks reengineering their operations to boost efficiencies and maximise revenue. These cuts may focus on retail or other banking divisions. If business was rolling in then they might not bother doing this. Overall, the front-office fee generators will be less heavily impacted by these cuts.”

“Whilst several banks and other City firms may be looking to trim staffing levels across parts of Europe, they are also likely to be hiring in other areas. We are seeing stronger demand from our Asia offices than here in the UK.”

Number of bankers looking to switch jobs up by a third

Astbury Marsden says that the number of city staff looking for a new job has increased by over 32% in one month, with 14,280 looking for a new job in July 2011, up from 10,750 in June.

Mark Cameron says: “Staff had been sitting on their hands for much of this year – not wanting to join a new employer whilst there is so much uncertainty – but news of impending job cuts has forced them to get back onto the market in case it is their department that is forced to make redundancies.”

“Some of these will not actually end up moving jobs but they want to start meeting headhunters just in case the axe does fall.”

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