Grim winter ... bonuses are being cut and job numbers slashed. Photo: Bloomberg
THE scale of the City of London's demise has been laid bare by figures that show the number of frontline workers in the banking industry has fallen to an eight-year low.
The number of "approved" staff working in the financial services industry has fallen to just under 152,000, the lowest since 2004.
Analysis of the Financial Service Authority's database by corporate finance boutique IMAS, shows that people employed in frontline jobs by banks have fallen by nearly 20,000 since the financial crisis from a peak of about 170,000 in mid-2007.
The collapse of City job numbers shows no signs of slowing and is likely to accelerate, according to separate research from Deutsche Bank, which warned that investment banks could cull up to 7 per cent of their staff this year.
Deutsche Bank said it was "conservatively" estimating a 25 per cent peak-to-trough reduction in staff numbers and that the cuts seen so far were just the start of a more severe reduction in staff numbers.
"Most cost-cutting in the last 18 months has been shedding headcount added in the mini-bull market of late 2009 and early 2010. Only in [the second half of last year] has true cost reduction gathered momentum," said the bank.
City headhunters say the cull in frontline jobs is likely to come hand-in-hand with far lower bonuses for most staff. Veni Partners, a recruitment firm, estimates bonuses will be down 30 per cent on last year and the message from banks to staff was that "this year, your job is your bonus".
With lower bonuses and job cuts on the horizon, an increasing number of bankers are opting to leave the City and start their own consultancy or take jobs in the corporate sector, often working for former clients.