Bank on white-collar crisis
White-collar recession: Job cuts will total as many as 1000 by the end of this year. Photo: Gabriele Charotte
AUSTRALIA is on the cusp of a white-collar recession with insiders warning that thousands of jobs are at risk in the finance sector, after it emerged yesterday that ANZ planned to cut 700 jobs.
But The Saturday Age has established the job cuts will total as many as 1000 by the end of this year, which will be more than the bank shed at the height of the global financial crisis.
They come a day after the Royal Bank of Scotland announced plans to close its investment banking business, leading to the loss of more than 200 jobs in Australia.
Economists have warned Australia is vulnerable to a recession this year with a wholesale funding squeeze in Europe raising debt costs for banks such as ANZ.
Experts say thousands of jobs will be lost from the industry this year as banks scramble to adjust to an era of low credit growth and higher funding costs.
This comes on top of cuts of 2150 jobs between March 2009 and last September in ANZ's Australian division. ''We have run a policy of shedding jobs through attrition since October last year,'' an executive said.
''Temps have not been rehired once their contract has expired. Secondments have been stopped. We have outsourced two whole floors of operations staff from a [Melbourne] office to Manila [in the Philippines]. If you count all those jobs since October, along with what will be announced in the next week … we will lose more staff than we did as a result of the GFC.''
National secretary of the Finance Services Union Leon Carter criticised the bank for shedding jobs when it had record profitability. ''Yet again the first time anything gets tough in finance the only trick in their locker is to put jobs on the line,'' he said.
''It continues to be a highly profitable organisation that is making multibillion-dollar profits. They have an obligation to keep everybody employed.''
Financial Services Minister Bill Shorten said: ''We haven't been briefed specifically on any decisions of the ANZ in terms of jobs. We regard any job losses as unfortunate.''
At the start of 2007 Australia's banks, excluding ANZ Asia, employed 155,000. Four years later that figure has grown to 178,000.
In ANZ alone, the number of employees in the group's global operations increased by 12,000 since September 2008, from 36,900 to 48,900. But ANZ's Australian division has shed more than 2100 jobs in the past two years - from 19,922 to 17,768 - as it sends more jobs offshore.
Analysts say banks will be forced to cut staff for the next few years to protect profit margins. The high levels of consumption and lending they enjoyed in recent years will not continue.
Economists also say we might expect a further upheaval in the retail industry, which employs 1.2 million people, following the job losses last year.
The Grattan Institute's Saul Eslake said: ''I think there will be a shake-out in employment in retailing this year.''